Time: 10:00 am - 11:30 am, Mar. 13th, 2026
Speaker: Yuyang Jiang (Princeton University)
Venue: Zhifuxuan Classroom, Langrun Garden, Peking University
Abstract：
Transportation networks are often built by multiple jurisdictions whose investment decisions may not fully account for cross-border benefits. This paper builds a framework to evaluate the welfare implications of limited regional cooperation and central subsidies in transportation investments, accounting for goods trade, commuting, and governments' budget constraints. In this framework, regional governments choose investments in their segments of the network to serve constituents' interests, taking as given the investment choices of other regions and cost-sharing subsidies from a central government. Through the lens of the model, decentralized investment in the U.S. highway network leads to 15% underinvestment relative to the national optimum and generates a welfare loss equivalent to 30% of current highway spending. While raising the federal subsidy rate increases total spending, it fails to achieve a cost-effective allocation of investment across the network.
Speaker：
Yuyang Jiang is a PhD candidate in Economics at Princeton University. Her research focuses on market failures arising from strategic interactions between governments and between firms, and how public policies may address them.
