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Gathering Knowledge From All Over the World to Enhance Economic Theory

Q: What is the topic of your research?

My research is on resource allocation. I think theoretically about how the limited resources in the world can be used to make people happy, and I attempt to create an optimal plan.

Creating Opportunities for Students to Interact with the Knowledge of the World

Q: What kind of content is involved in your selected program?

While the Institute of Social and Economic Research strives to become an institution at which more international research can be done, I’m glad the university is backing international joint research. What’s necessary for this program is “not only research, but also content that will allow results to be given back to other researchers and students at Osaka University.” As one of the projects that will answer this need, we have researchers from overseas deliver lectures for graduate school students.

I hope that the students will get some kind of inspiration from these international researchers who are active on the front lines of their respective fields.

Q: What is the aim of these lectures?

 Well, for example, Professor Thomson, who, while being one of the world’s pre-eminent researchers on game theory, is well known for developing young researchers, came to Japan in May. He’s got the know-how to succeed as a researcher in the field of economics, and he has compiled that know-how into a best-selling book amongst economic researchers entitled A Guide for the Young Economist.

For those who want to work in the field of economics but don’t know in which direction to begin, this will be a great chance to hear directly from a scholar who has had success in the field and possesses the know-how to do so. I think this has become a useful project for Osaka University to cultivate outstanding researchers.

From Countries like India, Spain, and Singapore, to OU

Q: What kind of people are these collaborative researchers?

Associate Professor Debasis Mishra of the Indian Statistical Institute is our main collaborative researcher, and he is here at OU doing research for over 1 month. As you may already know, India’s economy has grown quite a bit, and their research has also reached a high level, so I think that there is merit to performing collaborative research with this kind of Indian research facility. There are also researchers from the National University of Singapore, the Autonomous University of Barcelona, Spain; Stanford University, Northwestern University, and Rochester University in the U.S., among others, which allows us to advance our research with the world’s highest level researchers.

Performing Efficient Resource Allocation

Q: What kind of research have you been performing?

Let me explain the research theme of “resource allocation” theoretically. In order to use resources effectively, you have to comprehend information. For example, let’s break it down into distribution of coffee beans based on demand. If you know how much people in society want coffee, for what reason they want coffee, and who will make the most meaningful use of it, you can distribute based on this information. However, obtaining this information is not that simple. So it comes down to how well you can draw this information out, and how well you can distribute based on this information. That is the theme of my research. It seems abstract, but because of this, we can apply this research to various real life problems.

One of our collaborative researchers, Chew Soo Hong, is analyzing the quota system on vehicle purchasing licenses. In Singapore, the standard of living is high, and everyone wants to own a car, but it’s a small country about the size of Awaji Island, so there’s really no way that’s going to happen. So this is where the theme of resource allocation comes into play in terms of who should obtain the right to purchase a car. In addition to this, we will continue to advance collaborative research with international researchers on various other challenges under this theme such as quotas on airport landing slot distribution and frequency allocation.

By being directly exposed to the accomplishments of these collaborative researchers, we hope to provide inspiration to students and young researchers and further advance research at Osaka University.

Osaka University International Joint Research Promotion Program

This is a program which aims to raise the level of research and support globalization at OU through supporting advanced research between international researchers and researchers at Osaka University. This program supports international researchers performing leading edge research at overseas research institutions who come to Osaka University to perform collaborative research for at least one month a year. This program was started in the 2013-2014 academic year, and currently 22 projects underway. As of June 2014, international joint laboratories have been established with 22 universities and research institutions in 13 different countries.

Introducing a "Frequency Allocation" Auction System 

Professor Serizawa is currently performing analysis that will lead to institutional design of resource allocation, such as “frequency allocation quotas of cellular phones” in collaboration with Associate Professor Mishra, an expert in game theory.

• Workings of the Invisible Hand

A frequency license is the right to use a specific frequency of radio waves, and is indispensable in today’s cellular phone industry. As can be seen by the increase in the huge operating profits of cell phone carriers, getting these licenses yields enormous value. Many developed countries, not including Japan, have implemented a frequency auction system. Said Professor Serizawa, “Auctions are the most effective way to put a quota on frequency licenses. This is a good example of how true the phrase ‘the invisible hand is at work in the marketplace’ really is. Bidding comes down to businesses which have a high level of business sense and a high possibility of realizing their plans.” When a business fails, it’s not just the business, but the financial institutions and investors as well that will suffer losses, so the probability of reckless bidding will go down. “At an auction, a decision is made automatically based on the bids. In particular, if one utilizes a simultaneous ascending auction, the winning bid will be appropriate for the projected profits for each business, and the business with the most know business ability will win the bid. Information on business ability and feasibility of plans for each company, which is usually difficult to obtain, is naturally included into the bids themselves."


• In Japan, a Comparative Judging Method

While it’s standard for frequency allocation to occur through auctions in other countries, in Japan, a comparative judging method through the government is still being employed. Associate Professor Serizawa had this to say: “Businesses are still being designated through an ineffective method in which the value of frequencies cannot be maximized. According to Associate Professor Serizawa, if we were to compare frequencies to land, in the Japanese method, it would be like lending out a super-prime space in front Tokyo Station to specific businesses for next to nothing. Associate Professor emphasized, “As an industrial policy, licenses without compensation are practically subsidies. If we were to introduce auctions, this would not only become national income, but we would also be able to better distribute licenses.”

• Shigehiro SERIZAWA

A graduate of the College of Social Sciences, University of Tsukuba, Associate Professor Serizawa obtained his Ph.D in economics from the University of Rochester, USA. His fields of study include, microeconomics, game theory, and mechanism design. He has served in his current position since 2004. From 2010 to 2013, he served as the director for the Institute of Social and Economic Research.

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