ISEG is organising a new session of the Research Seminars on 7 May, from 13.00 to 14.00, in the ISEG's Lecture Theatre 3 (Quelhas, 4th Floor).
This seminar will have as its keynote speaker will be Professor Marco Fongoni, from Aix-Marseille School of Economics, who will present a paper on 'Aspirations as Reference Points, the abstract for which can be found below.
The 2nd Semester Research Seminars will be held weekly up until 4 June and will feature members of ISEG's faculty, as well as from other Portuguese and international universities. Further information HERE.
Free admission, subject to room capacity.
Abstract
We develop a model of individual effort choice towards the achievement of an outcome, where the individual compares realized outcomes in relation to an aspiration reference point. We provide sufficient conditions for the dual nature of aspirations: moderate aspirations can motivate, but excessively high aspirations can discourage; and for the existence of states in which aspirations are fulfilled. We then study how this non-monotonic relationship between aspirations and effort interact in a dynamic environment when aspirations are endogenous to the individual's realized outcomes in the past. We show how behavioural traits such as aversion to failure and perseverance can crucially affect an individual's achievements along the equilibrium path, providing a novel perspective on the dual effect of aspirations on economic behavior: holding excessively high aspirations can be frustrating, but can also lead to generating strictly better outcomes when individuals particularly dislike failure and are perseverant in the pursuit of their goals.