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).

Os livros de viagens medievais

Quando tomados no seu todo, os livros de viagens medievais formam um género multifacetado. São obras de carácter diverso, que têm na sua base propósitos igualmente diferenciados. No entanto, ainda que de forma variável e sem qualquer padrão estabelecido, o recurso comum a um conjunto de procedimentos narrativos garante aos textos que compõem este género diversificado uma forma literária autónoma no panorama da prosa medieva. Uma forma literária que, na essência, oferece uma visão bastante clara da concepção do mundo e da realidade na Idade Média, ao mesmo tempo que constitui uma fonte incontornável para compreender aspectos muito diversos da cultura medieval.

The role of guarantees in pension plan design: Pension saving decisions

This study centers on the assessment of psychological value of guarantees in pension products and the behavior biases associated with choice. When a guarantee on a product increases from 99% to 99,5% less than half of respondents show willingness to pay in contrast with 73% when going from 99,5% to 100%. Out of 105 respondents, 55 show that their choices concerning pension products are inconsistent with classic utility theory. Financial background proves insignificant thus pointing to behavioral biases. As individuals make choices that leave them worse-off, we argue that pension plan design would highly benefit from public policy interventions.

A segurança no terrorismo e na indústria dos eventos

Nowadays, safety and security regarding the tourism and events industries are a fundamental subject to society. Portugal’s tourism has significantly increased its number of visitors, whether due to the increasing number of cruisers docking in Lisbon, or due to visitors arriving by air, travelling the country from North to South and staying in the most varied accommodation units. Issues like human security and internal security of the different countries, even the security in the world, as development factors of a modern society, are discussed on a daily basis. On the contrary, few deal with tourism and major events security as being part of internal security, as well as the existing barriers tourism encounters to integrate the system for fighting terrorism. Although two distinct activities, they are complementary and may influence the country’s economy, provided that they can offer certainty to all actors involved. It is this substance that organised crime groups look for when planning terror acts. Therefore, as tourism can offer deception and shelter opportunities and events the theatre of a possible attack, those events assemble all the necessary conditions for an attack to achieve its goals.

Basel III: The impact of new capital requirements on profitability of Portuguese Banks

This empirical study aims to explore the impact of increased capital ratio requirements, on the ROE of the Portuguese banking sector. The paper employs both a quantitative- and qualitative approach, with the qualitative approach as the main method of research. The method adopted to conduct the qualitative research was semi structured elite interviews with banking executives. Higher capital requirements decrease the ROE of banks in Portugal, but huge impairments charges, macroeconomic factors and increased costs of deposits are clearly the dominant reasons for the reduced levels of ROE the past years. Among the measures taken to increase capital ratios, reduction of RWAs and non-core assets have been the main focus, but the issuance of CoCos is regarded as the most expensive measure due to high interest payments. However, the CoCos will not have any effect on the ROE in the long term. It is difficult to draw any conclusions on the impact of more equity in the balance sheet on the ROE of Portuguese banks, as many banks currently don’t generate enough money to pay back on shareholders´ investments.

Good vibrations

The work reported in this thesis addresses the research question of when and how positive psychological states impact positive behavior and positive organizational development. We present two theoretical essays and three empirical studies to find possible answers to this question and we use a multitude of methodologies with different epistemological assumptions, including quantitative correlation analysis, social network analysis and qualitative grounded theory analysis. In the whole, our work shows that positive psychological states are fundamental to promote individual and organizational higher-levels of performance and well-being. It also points that the capability to induce positive psychological states in others (an “alter-positive” approach) is a powerful way to develop outstanding individuals and organizations. In a broader sense, it stresses the need to promote good vibrations as a fundamental route to create a better world.

Inclusão de crianças com paralisia cerebral no pré-escolar: perspetivas dos pais

Dissertação de mestrado em Educação Especial (área de especialização em Intervenção Precoce)

A spatial multicriteria model for urban accessibility mapping

Accessibility is nowadays an important issue for the development of cities. It is seen as a priority in order toguarantee equal access to fundamental rights, to improve the quality of life of citizens and to ensure that everyone, regardless of age, mobility or ability, have equal access to all the resources and benefits cities have to offer. Consequently, factors closely related to the accessibility have gained a higher relevance for identifying and assessing the location of urban facilities. The main goal of the paper is to present an accessibility evaluation model applied in Santarém, in Brazil, a city located midway between the larger cities of Belem and Manaus. The research instruments, sampling method and data analysis proposed for mapping urban accessibility are described. Daily activities were used to identify and group key destinations. The model was implemented within a geographic information system and integrates the individualâ s perspective through the definition of each key destination weight, reflecting their significance for daily activities in the urban area. Accessibility to key destinations was mapped over 24 districts of the city of Santarém. The results of this model application can support city administration decision-making for new investments in order to improve urban quality of life.

A influência dos blogues de beleza no processo de tomada de decisão das consumidoras

Dissertação de mestrado em Marketing e Estratégia

Os contratos de crédito ao consumo e o sobreendividamento dos consumidores

Dissertação de mestrado em Direito dos Contratos e da Empresa

The importance of risk assessment in the context of investment project management: a case study

Risk management is an important component of project management. Nevertheless, such process begins with risk assessment and evaluation. In this research project, a detailed analysis of the methodologies used to treat risks in investment projects adopted by the Banco da Amazonia S.A. was made. Investment projects submitted to the FNO (Constitutional Fund for Financing the North) during 2011 and 2012 were considered for that purpose. It was found that the evaluators of this credit institution use multiple indicators for risk assessment which assume a central role in terms of decision-making and contribute for the approval or the rejection of the submitted projects; namely, the proven ability to pay, the financial records of project promotors, several financial restrictions, level of equity, level of financial indebtedness, evidence of the existence of a consumer market, the proven experience of the partners/owners in the business, environmental aspects, etc. Furthermore, the bank has technological systems to support the risk assessment process, an internal communication system and a unique system for the management of operational risk.

Preschool education in Brazil: does public supply crowd out private enrollment?

Expanding access to preschool education is a particularly important policy issue in developing countries, where enrollment rates are generally much lower, and where private institutions constitute a much larger share of the formal preschool sector, than in developed countries. This paper examines if an expansion in the supply of public preschool crowds-out private enrollment using rich data for municipalities in Brazil from 2000 to 2006, where federal transfers to local governments change discontinuously with given population thresholds. Results from a regression-discontinuity design reveal that larger federal transfers lead to a significant expansion of local public preschool services, but show no evidence of crowding-out of private enrollment, nor of negative impacts on the quality of private providers. This finding is consistent with a theory in which households differ in willingness-to-pay for preschool services, and private suppliers optimally adjust prices in response to an expansion of lower-quality, free-of-charge public supply. In the context of the model, the absence of crowding-out effects of more public preschool providers can be rationalized by the existence of relatively large differences in willingness-to-pay for preschool services across different demand segments. Our theoretical and empirical findings therefore suggest that in developing country settings characterized by relatively high income inequality, an expansion in public preschool supply will likely significantly increase enrollment among the poorest segments of society, and need not have adverse effects on the quantity or quality of local private supply.

Políticas, processos e atores de privatização da educação em Portugal: apontamentos

Procurou-se contribuir para esboçar uma problemática de pesquisa em torno da privatização em educação, no quadro das relações entre o Estado e os domínios público e privado e tomando como horizonte a construção do direito fundamental à educação e do bem-estar social, situados no Portugal democrático. Argumentou-se que o Estado e as políticas públicas têm, nestes 40 anos, desempenhado um papel central naqueles processos. Durante muito tempo, com fases e combinações distintas, pode observar-se uma espécie de duplicidade na ação estatal, com o acento tónico ora na expansão e consolidação do sistema público, ora no apoio e sustentação de atores e dinâmicas de ampliação do espaço e da influência privados, às vezes assumindo simultaneamente uma e outra orientação em setores diferenciados. Sugere-se, no entanto, que, desde 2011, no quadro de políticas regressivas austeritárias de ajustamento estrutural, com origem na União Europeia, se assistiu a uma rutura em favor de um projeto societal neoliberal radical que, a ser bem sucedido, procura instituir um sistema educativo pobre para pobres e alterar o estatuto e o papel do direito à educação e do sistema público que constitucionalmente o realiza.

O hospital da misericórdia de Penafiel (1600-1850)

Tese de Doutoramento em História - Especialidade de Idade Moderna

Europa: uma questão profana ou sagrada?: estudo sobre as relações entre o poder político e as religiões no âmbito do processo de integração europeia

Dissertação de mestrado em Direito da União Europeia