Os próximos seminários de investigação do ciclo ISEG Research Seminars’25 realizam-se nos dias 14 e 15 de maio, entre as 13h00 e as 14h00, no Anfiteatro 3 (Edifício Quelhas, Piso 4).
A sessão de 14 de maio terá como speaker o Professor Carlos Oliveira, que apresentará o paper “Investment in two alternative projects: combining optimal switching with the exit option”. No seminário de dia 15, o Professor Brian Knight, da Universidade de Brown (EUA), irá apresentar o trabalho de investigação “Policing for profit? Evidence from post-Ferguson reforms in Missouri”. Os abstracts de ambos os papers podem ser consultados mais abaixo.
Os seminários de Research do 2º Semestre decorrem semanalmente até 4 de junho, contando com a participação de docentes do ISEG e de outras escolas nacionais e internacionais. Saiba mais AQUI.
Entrada livre, limitada à capacidade da sala.
Abstracts
“Investment in two alternative projects: combining optimal switching with the exit option” (joint work with Cláudia Nunes and Igor Kravchenko)
We use an analytical framework to examine a firm’s investment and switching strategy under uncertainty. The context is the possibility to launch and operate two distinct projects, one at a time, with exposure to a stochastic exogenous price. We allow for multiple switches between the two projects, along with abandonment options from each. These possibilities fundamentally influence the operational strategy. We show that under some conditions, a dichotomous waiting region may arise at the investment stage. In this case we have an inaction region, for a range of prices in a certain bounded interval, where the firm does not invest and waits to have more information about the price evolution. This region vanishes for a high level of uncertainty. Additionally, the firm may operate with a negative instantaneous profit. We prove that investment in this region is never optimal. Numerical examples enable comparative statics, while extension to allow for time-to-build is included.
“Policing for profit? Evidence from post-Ferguson reforms in Missouri”
In the United States, fines and fees from policing can be a major source of government revenue. Critics argue this incentivizes law-enforcement to maximize collections rather than safety. We investigate this issue in the context of a series of reforms in Missouri designed to curb policing for profit after the 2014 shooting of Michael Brown in Ferguson. In the time series, we document large aggregate declines in per-capita collections and traffic stops immediately after the shooting. The aggregate decline is concentrated in municipalities raising significant revenue from collections at baseline and in locations with the motive and opportunity to engage in policing for profit. Examining specific reforms, we find that a 20 percent cap on revenue from policing introduced after Ferguson can explain as much as half of the aggregate decline. Taken together, our findings highlight both how revenue motives can distort the criminal justice system, and how simple reforms that realign real-world incentives can change police behavior.