Essays on bounded rationality: Individual decision and strategic interaction

Economics is a social science which, therefore, focuses on people and on the decisions they make, be it in an individual context, or in group situations. It studies human choices, in face of needs to be fulfilled, and a limited amount of resources to fulfill them. For a long time, there was a convergence between the normative and positive views of human behavior, in that the ideal and predicted decisions of agents in economic models were entangled in one single concept. That is, it was assumed that the best that could be done in each situation was exactly the choice that would prevail. Or, at least, that the facts that economics needed to explain could be understood in the light of models in which individual agents act as if they are able to make ideal decisions. However, in the last decades, the complexity of the environment in which economic decisions are made and the limits on the ability of agents to deal with it have been recognized, and incorporated into models of decision making in what came to be known as the bounded rationality paradigm. This was triggered by the incapacity of the unboundedly rationality paradigm to explain observed phenomena and behavior. This thesis contributes to the literature in three different ways. Chapter 1 is a survey on bounded rationality, which gathers and organizes the contributions to the field since Simon (1955) first recognized the necessity to account for the limits on human rationality. The focus of the survey is on theoretical work rather than the experimental literature which presents evidence of actual behavior that differs from what classic rationality predicts. The general framework is as follows. Given a set of exogenous variables, the economic agent needs to choose an element from the choice set that is avail- able to him, in order to optimize the expected value of an objective function (assuming his preferences are representable by such a function). If this problem is too complex for the agent to deal with, one or more of its elements is simplified. Each bounded rationality theory is categorized according to the most relevant element it simplifes. Chapter 2 proposes a novel theory of bounded rationality. Much in the same fashion as Conlisk (1980) and Gabaix (2014), we assume that thinking is costly in the sense that agents have to pay a cost for performing mental operations. In our model, if they choose not to think, such cost is avoided, but they are left with a single alternative, labeled the default choice. We exemplify the idea with a very simple model of consumer choice and identify the concept of isofin curves, i.e., sets of default choices which generate the same utility net of thinking cost. Then, we apply the idea to a linear symmetric Cournot duopoly, in which the default choice can be interpreted as the most natural quantity to be produced in the market. We find that, as the thinking cost increases, the number of firms thinking in equilibrium decreases. More interestingly, for intermediate levels of thinking cost, an equilibrium in which one of the firms chooses the default quantity and the other best responds to it exists, generating asymmetric choices in a symmetric model. Our model is able to explain well-known regularities identified in the Cournot experimental literature, such as the adoption of different strategies by players (Huck et al. , 1999), the inter temporal rigidity of choices (Bosch-Dom enech & Vriend, 2003) and the dispersion of quantities in the context of di cult decision making (Bosch-Dom enech & Vriend, 2003). Chapter 3 applies a model of bounded rationality in a game-theoretic set- ting to the well-known turnout paradox in large elections, pivotal probabilities vanish very quickly and no one should vote, in sharp contrast with the ob- served high levels of turnout. Inspired by the concept of rhizomatic thinking, introduced by Bravo-Furtado & Côrte-Real (2009a), we assume that each per- son is self-delusional in the sense that, when making a decision, she believes that a fraction of the people who support the same party decides alike, even if no communication is established between them. This kind of belief simplifies the decision of the agent, as it reduces the number of players he believes to be playing against { it is thus a bounded rationality approach. Studying a two-party first-past-the-post election with a continuum of self-delusional agents, we show that the turnout rate is positive in all the possible equilibria, and that it can be as high as 100%. The game displays multiple equilibria, at least one of which entails a victory of the bigger party. The smaller one may also win, provided its relative size is not too small; more self-delusional voters in the minority party decreases this threshold size. Our model is able to explain some empirical facts, such as the possibility that a close election leads to low turnout (Geys, 2006), a lower margin of victory when turnout is higher (Geys, 2006) and high turnout rates favoring the minority (Bernhagen & Marsh, 1997).

Novel techniques for the design and practical realization of switched-capacitor circuits in deep-submicron CMOS technologies

Dissertação apresentada para obtenção do Grau de Doutor em Engenharia Electrotécnica e de Computadores pela Universidade Nova de Lisboa, Faculdade de Ciências e Tecnologia

Dual-phase inkjet printed electrochromic layers based on PTA and WOX/TiO2 nanoparticles for electrochromic applications

Thesis submitted in Faculdade de Ciências e Tecnologia da Universidade Nova de Lisboa for the degree of Master in Materials Engineering

An approach to teach Calculus/Mathematical Analysis (for engineering students) using computers and active learning – its conception, development of materials and evaluation

Dissertação para obtenção do Grau de Doutor em Ciências da Educação

Case study: A negotiation between a shopping centre and a retailer

A Work Project, presented as part of the requirements for the Award of a Masters Degree in Management from the NOVA – School of Business and Economics

Weimar and the crisis of political legitimacy in Late Modernity : Max Weber, Hans Kelsen and Carl Schmitt

Através da comparação das ideias de três grandes teóricos da política no conturbado contexto da República de Weimar, esta dissertação pretende reconsiderar a crise da legitimidade política na modernidade tardia. Tal crise é concebida tanto em sentido estrito, enquanto crise das democracias liberais perante os efeitos de rápidas mudanças sociais e a emergência da política de massas, como em sentido lato, ou seja, enquanto crise dos alicerces político-intelectuais da era moderna. Nessa medida, veremos como os juízos de Weber, Kelsen e Schmitt não se limitam a veicular veredictos contrastantes sobre a democracia de massas, o parlamentarismo e os partidos políticos, remetendo também para narrativas distintas sobre o destino do homem moderno – narrativas que oscilam entre o optimismo moderado, a ambivalência e a reacção hostil.

Improving practical reasoning and argumentation

This thesis justifies the need for and develops a new integrated model of practical reasoning and argumentation. After framing the work in terms of what is reasonable rather than what is rational (chapter 1), I apply the model for practical argumentation analysis and evaluation provided by Fairclough and Fairclough (2012) to a paradigm case of unreasonable individual practical argumentation provided by mass murderer Anders Behring Breivik (chapter 2). The application shows that by following the model, Breivik is relatively easily able to conclude that his reasoning to mass murder is reasonable – which is understood to be an unacceptable result. Causes for the model to allow such a conclusion are identified as conceptual confusions ingrained in the model, a tension in how values function within the model, and a lack of creativity from Breivik. Distinguishing between dialectical and dialogical, reasoning and argumentation, for individual and multiple participants, chapter 3 addresses these conceptual confusions and helps lay the foundation for the design of a new integrated model for practical reasoning and argumentation (chapter 4). After laying out the theoretical aspects of the new model, it is then used to re-test Breivik’s reasoning in light of a developed discussion regarding the motivation for the new place and role of moral considerations (chapter 5). The application of the new model shows ways that Breivik could have been able to conclude that his practical argumentation was unreasonable and is thus argued to have improved upon the Fairclough and Fairclough model. It is acknowledged, however, that since the model cannot guarantee a reasonable conclusion, improving the critical creative capacity of the individual using it is also of paramount importance (chapter 6). The thesis concludes by discussing the contemporary importance of improving practical reasoning and by pointing to areas for further research (chapter 7).

Traceability support in software product lines

Dissertação apresentada na Faculdade de Ciências e Tecnologia da Universidade Nova de Lisboa para a obtenção do grau de Mestre em Engenharia Informática.

Expectativas de responsabilidade filial e orientação da responsabilidade no cuidado aos idosos

RESUMO: Muitos desenvolvimentos demográficos e estruturais ocorreram nas relações intergeracionais, os quais provocaram um impacto nas ligações familiares, tais como o aumento da longevidade e as alterações da dinâmica estrutural e social da família, tendo sido colocado em causa a vitalidade das obrigações familiares e solidariedade familiar, nomeadamente entre pais e filhos adultos. Assim, com este estudo pretendeu-se verificar a presença de solidariedade entre pais e os seus filhos adultos, assim como as expectativas de responsabilidade filial dos pais e as suas opiniões e preferências no que se refere à orientação da responsabilidade para família/ serviços públicos no cuidado aos idosos. De forma a alcançar os objectivos, foi aplicado um questionário a 97 alunos, da Universidade Sénior da Póvoa de Santa Iria, com 55 ou mais anos e que tivessem pelo menos um filho adulto. Foi possível chegar à conclusão de que existe solidariedade entre pais e filhos adultos, assim como os pais consideram que existe uma responsabilidade mista (família/Estado) no cuidado aos idosos e que preferem os apoios formais em detrimento dos informais (familiares) – contrariando a orientação familística. Contudo, apesar disso continuam a apresentar expectativas elevadas em relação à responsabilidade que os filhos devem ter para com os pais, nomeadamente a nível da dimensão de apoio emocional, sendo a dimensão de apoio instrumental a excepção. Desta forma, é possível concluir que há uma tendência por parte da população inquirida em preferir a complementaridade de apoios formais e informais, com consequente especialização de tarefas: instrumental e emocional, respectivamente-----------ABSTRACT: Intergenerational relations have been affected by demographical and structural changes that had impact on family relationships. The increase in life expectancy and the changes in the families’ structural and social dynamics have put at risk the vitality of family obligations and solidarity, namely between parents and adult children. Therefore, this research aimed at studying the existence of solidarity between parents and adult children as well as the parents’ expectations towards their children’s responsibilities and their views and preferences on family and welfare state responsibility as far as elderly people are concerned. In order to achieve this, a questionnaire was devised and subsequently applied to 97 participants attending the Universidade Sénior in Póvoa de Santa Iria, aged 55 or older, with at least one adult child. The results indicate that there is solidarity between parents and adult children and that parents consider that both the family and the state should share the responsibility towards elderly people. Moreover, the study proves that formal support is preferred to the detriment of an informal one (family), which contradicts the familistic approach. However, parents evince high expectations as far as children responsibility towards them is concerned, specially in terms of emotional support. This does not apply, however, to the instrumental support domain. In conclusion, the study indicates that the participants tend to prefer the complementariness of formal and informal support with subsequent task specialisation: instrumental and emotional, respectively.

Characterization of Nitric Oxide Reductase (NOR) from pseudomonas nautica, a study on biologic nitric oxide reduction

Dissertation submitted to obtain the phD degree in Biochemistry, specialty in Physical- Biochemistry, by the Faculdade de Ciências e Tecnologia from the Universidade Nova de Lisboa