Candidate stability and voting correspondences

We study the incentives of candidates to enter or to exit elections in order to strategically affect the outcome of a voting correspondence. We extend the results of Dutta, Jackson and Le Breton (2000), who only considered single-valued voting procedures by admitting that the outcomes of voting may consist of sets of candidates. We show that, if candidates form their preferences over sets according to Expected Utility Theory and Bayesian updating, every unanimous and non dictatorial voting correspondence violates candidate stability. When candidates are restricted to use even chance prior distributions, only dictatorial or bidictatorial rules are unanimous and candidate stable. We also analyze the implications of using other extension criteria to define candidate stability that open the door to positive results.

Environmental management problems, future generations and social decisions

The decisions of many individuals and social groups, taking according to well-defined objectives, are causing serious social and environmental problems, in spite of following the dictates of economic rationality. There are many examples of serious problems for which there are not yet appropriate solutions, such as management of scarce natural resources including aquifer water or the distribution of space among incompatible uses. In order to solve these problems, the paper first characterizes the resources and goods involved from an economic perspective. Then, for each case, the paper notes that there is a serious divergence between individual and collective interests and, where possible, it designs the procedure for solving the conflict of interests. With this procedure, the real opportunities for the application of economic theory are shown, and especially the theory on collective goods and externalities. The limitations of conventional economic analysis are shown and the opportunity to correct the shortfalls is examined. Many environmental problems, such as climate change, have an impact on different generations that do not participate in present decisions. The paper shows that for these cases, the solutions suggested by economic theory are not valid. Furthermore, conventional methods of economic valuation (which usually help decision-makers) are unable to account for the existence of different generations and tend to obviate long-term impacts. The paper analyzes how economic valuation methods could account for the costs and benefits enjoyed by present and future generations. The paper studies an appropriate consideration of preferences for future consumption and the incorporation of sustainability as a requirement in social decisions, which implies not only more efficiency but also a fairer distribution between generations than the one implied by conventional economic analysis.

Inequity version and team incentives

We study optimal contracts in a simple model where employees are averse to inequity as modelled by Fehr and Schmidt (1999). A "selfish" employer can profitably exploit such preferences among its employees by offering contracts which create inequity off-equilibrium and thus, they would leave employees feeling envy or guilt when they do not meet the employer's demands. Such contracts resemble team and relative performance contracts, and thus we derive conditions under which it may be beneficial to form work teams of employees with distributional concerns who were previously working individually. Similar results are obtained for status-seeking and efficiency concerns preferences.

Equilibrium play and best response to (Stated) beliefs in constant sum games

We report experimental results on one-shot two person 3x3 constant sum games played by non-economists without previous experience in the laboratory. Although strategically our games are very similar to previous experiments in which game theory predictions fail dramatically, 80% of actions taken in our experiment coincided with the prediction of the unique Nash equilibrium in pure strategies and 73% of actions were best responses to elicited beliefs. We argue how social preferences, presentation effects and belief elicitation procedures may influence how subjects play in simple but non trivial games and explain the diferences we observe with respect to previous work.

Information networks and worker recruitment

This paper studies experimentally how the existence of social information networks affects the ways in which firms recruit new personnel. Through such networks firms learn about prospective employees' performance in previous jobs. Assuming individualistic preferences social networks are predicted not to affect overall labor market behavior, while with social preferences the prediction is that when bilaterally negotiated: (i) wages will be higher and (ii) that workers in jobs with incomplete contracts will respond with higher effort. Our experimental results are consistent with the social preferences view, both for the case of excess demand and excess supply of labor. In particular, the presence of information networks leads to more efficient allocations.

Business-science research collaboration under moral hazard

I analyze, in the context of business and science research collaboration, how the characteristics of partnership agreements are the result of an optimal contract between partners. The final outcome depends on the structure governing the partnership, and on the informational problems towards the efforts involved. The positive effect that the effort of each party has on the success of the other party, makes collaboration a preferred solution. Divergence in research goals may, however, create conflicts between partners. This paper shows how two different structures of partnership governance (a centralized, and a decentralized ones) may optimally use the type of project to motivate the supply of non-contractible efforts. Decentralized structure, however, always choose a project closer to its own preferences. Incentives may also come from monetary transfers, either from partners sharing each other benefits, or from public funds. I derive conditions under which public interventio

Stock market volatility and learning

Introducing bounded rationality in a standard consumption-based asset pricing model with time separable preferences strongly improves empirical performance. Learning causes momentum and mean reversion of returns and thereby excess volatility, persistence of price-dividend ratios, long-horizon return predictability and a risk premium, as in the habit model of Campbell and Cochrane (1999), but for lower risk aversion. This is obtained, even though our learning scheme introduces just one free parameter and we only consider learning schemes that imply small deviations from full rationality. The findings are robust to the learning rule used and other model features. What is key is that agents forecast future stock prices using past information on prices.

Three essays on the psychology of investment and financial markets

Préface My thesis consists of three essays where I consider equilibrium asset prices and investment strategies when the market is likely to experience crashes and possibly sharp windfalls. Although each part is written as an independent and self contained article, the papers share a common behavioral approach in representing investors preferences regarding to extremal returns. Investors utility is defined over their relative performance rather than over their final wealth position, a method first proposed by Markowitz (1952b) and by Kahneman and Tversky (1979), that I extend to incorporate preferences over extremal outcomes. With the failure of the traditional expected utility models in reproducing the observed stylized features of financial markets, the Prospect theory of Kahneman and Tversky (1979) offered the first significant alternative to the expected utility paradigm by considering that people focus on gains and losses rather than on final positions. Under this setting, Barberis, Huang, and Santos (2000) and McQueen and Vorkink (2004) were able to build a representative agent optimization model which solution reproduced some of the observed risk premium and excess volatility. The research in behavioral finance is relatively new and its potential still to explore. The three essays composing my thesis propose to use and extend this setting to study investors behavior and investment strategies in a market where crashes and sharp windfalls are likely to occur. In the first paper, the preferences of a representative agent, relative to time varying positive and negative extremal thresholds are modelled and estimated. A new utility function that conciliates between expected utility maximization and tail-related performance measures is proposed. The model estimation shows that the representative agent preferences reveals a significant level of crash aversion and lottery-pursuit. Assuming a single risky asset economy the proposed specification is able to reproduce some of the distributional features exhibited by financial return series. The second part proposes and illustrates a preference-based asset allocation model taking into account investors crash aversion. Using the skewed t distribution, optimal allocations are characterized as a resulting tradeoff between the distribution four moments. The specification highlights the preference for odd moments and the aversion for even moments. Qualitatively, optimal portfolios are analyzed in terms of firm characteristics and in a setting that reflects real-time asset allocation, a systematic over-performance is obtained compared to the aggregate stock market. Finally, in my third article, dynamic option-based investment strategies are derived and illustrated for investors presenting downside loss aversion. The problem is solved in closed form when the stock market exhibits stochastic volatility and jumps. The specification of downside loss averse utility functions allows corresponding terminal wealth profiles to be expressed as options on the stochastic discount factor contingent on the loss aversion level. Therefore dynamic strategies reduce to the replicating portfolio using exchange traded and well selected options, and the risky stock.

Observações ecológicas sobre Biomphalaria straminea (Dunker, 1848) em áreas do Nordeste, Brasil

The different climatic regions determine the zoogeographic distribution of various animal species depending on their particular conditions and ecological preferences. The host schistosomiasis planorbid is one of these species. This paper deals with the distribution of Biomphalaria straminea in northeast Brazil. It starts from the analysis of different climatic peculiarities in this region, associated to limnological observation done by the author in three different hydric collections in the state of Sergipe. It has been concluded that this is an "eurióioca" species. Its broad ecological valence permits this species to survive in regions where climate asperties are evident, requiring behavior and physiological adaptations. The species survives in all northeast region, from "zona da mata", in the coast, to the semi-arid "sertão".

Development of the First Disease Activity Index for Eosinophilic Esophagitis: Update on the EEsAI in 2011

Background a nd Aims: T he international E EsAI study g roupis currently developing the first activity index (EEsAI) specificfor Eosinophilic Esophagitis (EoE). Goal: To develop, evaluateand validate the EEsAI.Methods: T he d evelopment comprises three phases: 1.Selection of candidate items; 2. Evaluation of the activity indexin a f irst patient cohort; and 3. V alidation in a s econd EoEpatient cohort. Focus group interviews with patients were usedin p hase 1 to generate p atient r eported outcomes ( PRO)according to guidelines o f regulatory authorities ( FDA andEMA), whereas the section of biologic items was developed byDelphi r ounds of i nternational E oE experts from E urope andNorth America.Results: The EEsAI has a modular composition to assess thefollowing components o f EoE activity: p atient reportedoutcomes, endoscopic activity, histologic activity, laboratoryactivity, a nd quality of life. D efinitions f or all aspects o fendoscopic and histologic appearance were established byconsensus rounds among EoE experts. Symptom assessmenttools were created that take into account d ifferent foodconsistencies as w ell as f ood avoidance and specificprocessing strategies. T he EEsAI is evaluated in a c ohort ofadult EoE patients since March 2011.Conclusions: After successful validation, the EEsAI will allowto standardize outcome assessment in E oE t rials which w illlikely lead to its wide applicability.

Constrained school choice: an experimental study

The literature on school choice assumes that families can submit a preference list over all the schools they want to be assigned to. However, in many real-life instances families are only allowed to submit a list containing a limited number of schools. Subjects' incentives are drastically affected, as more individuals manipulate their preferences. Including a safety school in the constrained list explains most manipulations. Competitiveness across schools play an important role. Constraining choices increases segregation and affects the stability and efficiency of the final allocation. Remarkably, the constraint reduces significantly the proportion of subjects playing a dominated strategy.

The choice of banking firm: Are the interest rate a significant criteria?

The objective of the research is to know the factors that in Spain determine the choice of banking organization. The obtained results indicate that the dimension of the network of branches is the reason more valued. In spite of the increasing symmetry of the Spanish banking market, the preferences of the clients of the savings banks and those of the banks are not absolutely coincident, being the proximity - the main reason for election- much more valued by the former than by the latter. The existence of divergences in the preferences has also been detected according to the region and the typology of city of residence.

Inequality, Happiness and Relative Concerns: What Actually is their Relationship?

This paper briefly and informally surveys different theoretical models of relative concerns and their relation to inequality. Models of inequity aversion in common use in experimental economics imply a negative relation between inequality and happiness. In contrast, empirical studies on happiness typically employ models of relative concerns that assume that increases in others’ income always have a negative effect on own happiness. However, in these latter models, the relation between inequality and happiness can be positive. One possible solution is a rivalry model where a distinction is made between endowment and reward inequality which have respectively a negative and positive effect on happiness. These different models and their contrasting results may clarify why the empirical relationship between inequality and happiness has been difficult to establish.

Communication for Public Goods

This paper studies information transmission between multiple agents with di¤erent preferences and a welfare maximizing decision maker who chooses the quality or quantity of a public good (e.g. provision of public health service; carbon emissions policy; pace of lectures in a classroom) that is consumed by all of them. Communication in such circumstances suffers from the agents' incentive to "exaggerate" their preferences relative to the average of the other agents, since the decision maker's reaction to each agent's message is weaker than in one-to-one communication. As the number of agents becomes larger the quality of information transmission diminishes. The use of binary messages (e.g. "yes" or "no") is shown to be a robust mode of communication when the main source of informational distortion is exaggeration.

The demand for intensity versus frequency of alcohol consumption: Evidence from rural Australia

This paper develops a theoretical model for the demand of alcohol where intensity and frequency of consumption are separate choices made by individuals in order to maximize their utility. While distinguishing between intensity and frequency of consumption may be unimportant for many goods, this is clearly not the case with alcohol where the likelihood of harm depends not only on the total consumed but also on the pattern of use. The results from the theoretical model are applied to data from rural Australia in order to investigate the factors that affect the patterns of alcohol use for this population group. This research can play an important role in informing policies by identifying those factors which influence preferences for patterns of risky alcohol use and those groups and communities who are most at risk of harm.