Please use this identifier to cite or link to this item: http://hdl.handle.net/10316/29116
Title: New-issues markets as behavioural barriers to entry : an agent-based model of choices and market structure
Authors: Morais, Ulisses Lacerda de 
Orientador: Fortunato, Adelino Manuel Guimarães
Costa, Ernesto Jorge Fernandes
Keywords: Agent-based model; Barriers to entry; Entrepreneurship; New-issues market; Market concentration
Issue Date: 16-Jul-2015
Publisher: FEUC
Abstract: The possibility that the existence of New-Issues Markets (NIM) could promote, through a behavioural response of potential entrants, a greater market concentration on economic sectors is the object of the present work. I analyse in what conditions do entrepreneurs choose to abandon their plans of entering some industry in order to invest in securities of companies in that same industry. To engage this matter an agent-based model, named Utility Load, was developed and simulated in NetLogo platform, where the entrepreneurs rely on a hybrid heuristic among Prospect Theory and Random Walk Model of perceptual decision-making to choose between starting a firm, assembling a portfolio or doing neither by postponing their decision. I arrive at the conclusion that a lengthy investment horizon or high bonds’ coupon, by offering greater prospective gains, attracts the vast majority of potential entrants to the NIM, which has a nefarious effect on the sector’s structure by increasing its concentration – measured by the Herfindahl-Hirschman Index. Moreover, the model indicates that a more bounded rationale is welfare increasing whilst allowing firms to continuously issue new debt to the public diminishes welfare. The results narrow the scope of reality to be emulated in experimental works and open the door for future empirical researches on this matter by making them more attainable.
Description: Dissertação de mestrado em Economia (Economia Industrial), apresentada à Faculdade de Economia da Universidade de Coimbra, sob a orientação de Adelino Manuel Guimarães Fortunato e Ernesto Jorge Fernandes Costa.
URI: http://hdl.handle.net/10316/29116
Rights: openAccess
Appears in Collections:FEUC- Teses de Mestrado

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