Individual and aggregate money demands

I construct a model in which money and bond holdings are consistent with individual decisions and aggregate variables such as production and interest rates. The agents are infinitely-lived, have constant-elasticity preferences, and receive a fraction of their income in money. Each agent solves a Baumol-Tobin money management problem. Markets are segmented because financial frictions make agents trade bonds for money at different times. Trading frequency, consumption, government decisions and prices are mutually consistent. An increase in inflation, for example, implies higher trading frequency, more bonds sold to account for seigniorage, and lower real balances.

Launch plan for a new magazine for Pangea Lda. Company

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

Lor’s - Women personal rain protection solutions

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

Reciprocity, inequity aversion, and oligopolistic competition

This paper studies how reciprocity and inequity aversion influence the behavior of firms in imperfectly competitive markets. The paper shows that if reciprocal firms compete à la Cournot, then they are able to sustain “collusive” outcomes under a positive reciprocity equilibrium. By contrast, Stackelberg warfare outcomes may emerge under a negative reciprocity equilibrium. The results for inequity aversion are similar. Cournot competition between inequity averse firms can be harmful to consumers if it leads to equilibria where firms feel compassion toward each other. However, in equilibria where inequity averse firms are envious of each other consumers are better off than if firms were selfish. The paper also shows that only under very restrictive conditions does reciprocity or inequity aversion have an impact on Bertrand competition. Finally, the paper shows that non-selfish preferences have a greater impact on equilibrium outcomes in markets with a small number of firms.

Cereals and children: A study of their lifetime relation

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

Going twice to the polls?: Optimality of two-stage voting procedures

A Masters Thesis, presented as part of the requirements for the award of a Research Masters Degree in Economics from NOVA – School of Business and Economics

Collusion and reciprocity in infinitely repeated games

This paper extends the standard industrial organization models of repeated interaction between firms by incorporating preferences for reciprocity. A reciprocal firm responds to unkind behavior of rivals with unkind actions (destructive reciprocity), while at the same time, it responds to kind behavior of rivals with kind actions (constructive reciprocity). The main finding of the paper is that, for plausible perceptions of fairness, preferences for reciprocity facilitate collusion in infinitely repeated market games, that is, the critical discount rate at wish collusion can be sustained tends to be lower when firms have preferences for reciprocity than when firms are selfish. The paper also finds that the best collusive outcome that can be sustained in the infinitely repeated Cournot game with reciprocal firms is worse for consumers than the best collusive outcome that can be sustained in the infinitely repeated Cournot game with selfish firms.

Rebalancing frequency and the welfare cost of inflation

Cash-in-advance models usually require agents to reallocate money and bonds in fixed periods, every month or quarter, for example. I show that fixed periods underestimate the welfare cost of inflation. I use a model in which agents choose how often they exchange bonds for money. In the benchmark specification, the welfare cost of ten percent instead of zero inflation increases from 0.1 percent of income with fixed periods to one percent with optimal periods. The results are robust to different preferences, to different compositions of income in bonds or money, and to the introduction of capital and labor.

Do Migrants Send Remittances as a Way of Self-Insurance?

How do risk preferences affect migrant remittance behaviour? Examination of this relationship has only begun to be explored. Using a tailored representative survey of 1500 immigrants in the Greater Dublin Area, Ireland, we find a positive and significant relationship between risk aversion and migrant remittances. Risk-averse individuals are more likely to send remittances home and are, on average, likely to remit a higher amount, after controlling for a broad range of individual and group characteristics. The evidence we obtain is consistent with a “purchase of self-insurance” motive to remit in that we also find support for more remittances being sent by risk-averse immigrants who face higher wage risks and to individuals with more financial resources.

Spiteful Strategies. The ontogeny and the practice of spite in human interaction: an experimental game theory approach and empirical applications

As estratégias de malevolência implicam que um indivíduo pague um custo para infligir um custo superior a um oponente. Como um dos comportamentos fundamentais da sociobiologia, a malevolência tem recebido menos atenção que os seus pares o egoísmo e a cooperação. Contudo, foi estabelecido que a malevolência é uma estratégia viável em populações pequenas quando usada contra indivíduos negativamente geneticamente relacionados pois este comportamento pode i) ser eliminado naturalmente, ou ii) manter-se em equilíbrio com estratégias cooperativas devido à disponibilidade da parte de indivíduos malevolentes de pagar um custo para punir. Esta tese propõe compreender se a propensão para a malevolência nos humanos é inerente ou se esta se desenvolve com a idade. Para esse efeito, considerei duas experiências de teoria de jogos em crianças em ambiente escolar com idades entre os 6 e os 22 anos. A primeira, um jogo 2x2 foi testada com duas variantes: 1) um prémio foi atribuído a ambos os jogadores, proporcionalmente aos pontos acumulados; 2), um prémio foi atribuído ao jogador com mais pontos. O jogo foi desenhado com o intuito de causar o seguinte dilema a cada jogador: i) maximizar o seu ganho e arriscar ter menos pontos que o adversário; ou ii) decidir não maximizar o seu ganho, garantindo que este não era inferior ao do seu adversário. A segunda experiência consistia num jogo do ditador com duas opções: uma escolha egoísta/altruísta (A), onde o ditador recebia mais ganho, mas o seu recipiente recebia mais que ele e uma escolha malevolente (B) que oferecia menos ganhos ao ditador que a A mas mais ganhos que o recipiente. O dilema era que se as crianças se comportassem de maneira egoísta, obtinham mais ganho para si, ao mesmo tempo que aumentavam o ganho do seu colega. Se fossem malevolentes, então prefeririam ter mais ganho que o seu colega ao mesmo tempo que tinham menos para eles próprios. As experiências foram efetuadas em escolas de duas áreas distintas de Portugal (continente e Açores) para perceber se as preferências malevolentes aumentavam ou diminuíam com a idade. Os resultados na primeira experiência sugerem que (1) os alunos compreenderam a primeira variante como um jogo de coordenação e comportaram-se como maximizadores, copiando as jogadas anteriores dos seus adversários; (2) que os alunos repetentes se comportaram preferencialmente como malevolentes, mais frequentemente que como maximizadores, com especial ênfase para os alunos de 14 anos; (3) maioria dos alunos comportou-se reciprocamente desde os 12 até aos 16 anos de idade, após os quais começaram a desenvolver uma maior tolerância às escolhas dos seus parceiros. Os resultados da segunda experiência sugerem que (1) as estratégias egoístas eram prevalentes até aos 6 anos de idade, (2) as tendências altruístas emergiram até aos 8 anos de idade e (3) as estratégias de malevolência começaram a emergir a partir dos 8 anos de idade. Estes resultados complementam a literatura relativamente escassa sobre malevolência e sugerem que este comportamento está intimamente ligado a preferências de consideração sobre os outros, o paroquialismo e os estágios de desenvolvimento das crianças.************************************************************Spite is defined as an act that causes loss of payoff to an opponent at a cost to the actor. As one of the four fundamental behaviours in sociobiology, it has received far less attention than its counterparts selfishness and cooperation. It has however been established as a viable strategy in small populations when used against negatively related individuals. Because of this, spite can either i) disappear or ii) remain at equilibrium with cooperative strategies due to the willingness of spiteful individuals to pay a cost in order to punish. This thesis sets out to understand whether propensity for spiteful behaviour is inherent or if it develops with age. For that effect, two game-theoretical experiments were performed with schoolboys and schoolgirls aged 6 to 22. The first, a 2 x 2 game, was tested in two variants: 1) a prize was awarded to both players, proportional to accumulated points; 2), a prize was given to the player with most points. Each player faced the following dilemma: i) to maximise pay-off risking a lower pay-off than the opponent; or ii) not to maximise pay-off in order to cut down the opponent below their own. The second game was a dictator experiment with two choices, (A) a selfish/altruistic choice affording more payoff to the donor than B, but more to the recipient than to the donor, and (B) a spiteful choice that afforded less payoff to the donor than A, but even lower payoff to the recipient. The dilemma here was that if subjects behaved selfishly, they obtained more payoff for themselves, while at the same time increasing their opponent payoff. If they were spiteful, they would rather have more payoff than their colleague, at the cost of less for themselves. Experiments were run in schools in two different areas in Portugal (mainland and Azores) to understand whether spiteful preferences varied with age. Results in the first experiment suggested that (1) students understood the first variant as a coordination game and engaged in maximising behaviour by copying their opponent’s plays; (2) repeating students preferentially engaged in spiteful behaviour more often than maximising behaviour, with special emphasis on 14 year-olds; (3) most students engaged in reciprocal behaviour from ages 12 to 16, as they began developing higher tolerance for their opponent choices. Results for the second experiment suggested that (1) selfish strategies were prevalent until the age of 6, (2) altruistic tendencies emerged since then, and (3) spiteful strategies began being chosen more often by 8 year-olds. These results add to the relatively scarce body of literature on spite and suggest that this type of behaviour is closely tied with other-regarding preferences, parochialism and the children’s stages of development.

Social-media monitoring for cold-start recommendations

Generating personalized movie recommendations to users is a problem that most commonly relies on user-movie ratings. These ratings are generally used either to understand the user preferences or to recommend movies that users with similar rating patterns have rated highly. However, movie recommenders are often subject to the Cold-Start problem: new movies have not been rated by anyone, so, they will not be recommended to anyone; likewise, the preferences of new users who have not rated any movie cannot be learned. In parallel, Social-Media platforms, such as Twitter, collect great amounts of user feedback on movies, as these are very popular nowadays. This thesis proposes to explore feedback shared on Twitter to predict the popularity of new movies and show how it can be used to tackle the Cold-Start problem. It also proposes, at a finer grain, to explore the reputation of directors and actors on IMDb to tackle the Cold-Start problem. To assess these aspects, a Reputation-enhanced Recommendation Algorithm is implemented and evaluated on a crawled IMDb dataset with previous user ratings of old movies,together with Twitter data crawled from January 2014 to March 2014, to recommend 60 movies affected by the Cold-Start problem. Twitter revealed to be a strong reputation predictor, and the Reputation-enhanced Recommendation Algorithm improved over several baseline methods. Additionally, the algorithm also proved to be useful when recommending movies in an extreme Cold-Start scenario, where both new movies and users are affected by the Cold-Start problem.

The influence of price changes on consumers' purchase decisions

The development of an effective pricing strategy requires the acquaintance of consumers’ price perception as well as the range of elements that influence the price sensitivity. This paper analyses the relationships between product features, individual characteristics and the level of price increase/decrease that induces the consumers to change their purchase decisions. The results of a dedicated survey show, that price sensitivity, individual preferences, type of product and direction of price change and individual characteristics of consumers (gender, age, professional situation) have a significant impact on a threshold at which people are willing to choose the less attractive, but cheaper alternative to their favorite product or give up the variety in consumption. From a consumer behavior perspective, these findings play a fundamental role in pricing.

Shiva's dance: Crisis, local institutions and private firms

The uneven spatial distribution of start-ups and their respective survival may reflect comparative advantages resulting from the local institutional background. For the first time, we explore this idea using Data Envelopment Analysis (DEA) to assess the relative efficiency of Portuguese municipalities in this specific context. We depart from the related literature where expenditure is perceived as a desirable input by choosing a measure of fiscal responsibility and infrastructural variables in the first stage. Comparing results for 2006 and 2010, we find that mean performance decreased substantially 1) with the effects of the Global Financial Crisis, 2) as municipal population increases and 3) as financial independence decreases. A second stage is then performed employing a double-bootstrap procedure to evaluate how the regional context outside the control of local authorities (e.g. demographic characteristics and political preferences) impacts on efficiency.

Wealth Management in Africa: The Cape Verde Opportunity

This work project consists of a comprehensive study of the possibility of opening a Wealth Management (WM) firm located in Cape Verde (CV), and was made at the request of NovoBanco’s Research Sectorial team. WM is a growing industry that consists in the set of financial services provided to wealthy clients. After taking into account the expected industry growth of the Sub-Saharan region, the preferences of the African wealthy, the current industry structure, and the advantages and disadvantages of locating a WM business in CV, it is concluded that a business opportunity exists. The reasons for thus, along with relevant recommendations, including which services a new business should offer and whom to target specifically, are presented in the final section.

Machine ethics via logic programming

Machine ethics is an interdisciplinary field of inquiry that emerges from the need of imbuing autonomous agents with the capacity of moral decision-making. While some approaches provide implementations in Logic Programming (LP) systems, they have not exploited LP-based reasoning features that appear essential for moral reasoning. This PhD thesis aims at investigating further the appropriateness of LP, notably a combination of LP-based reasoning features, including techniques available in LP systems, to machine ethics. Moral facets, as studied in moral philosophy and psychology, that are amenable to computational modeling are identified, and mapped to appropriate LP concepts for representing and reasoning about them. The main contributions of the thesis are twofold. First, novel approaches are proposed for employing tabling in contextual abduction and updating – individually and combined – plus a LP approach of counterfactual reasoning; the latter being implemented on top of the aforementioned combined abduction and updating technique with tabling. They are all important to model various issues of the aforementioned moral facets. Second, a variety of LP-based reasoning features are applied to model the identified moral facets, through moral examples taken off-the-shelf from the morality literature. These applications include: (1) Modeling moral permissibility according to the Doctrines of Double Effect (DDE) and Triple Effect (DTE), demonstrating deontological and utilitarian judgments via integrity constraints (in abduction) and preferences over abductive scenarios; (2) Modeling moral reasoning under uncertainty of actions, via abduction and probabilistic LP; (3) Modeling moral updating (that allows other – possibly overriding – moral rules to be adopted by an agent, on top of those it currently follows) via the integration of tabling in contextual abduction and updating; and (4) Modeling moral permissibility and its justification via counterfactuals, where counterfactuals are used for formulating DDE.