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This thesis includes three essays exploring some economic implications of queueing. A preliminary chapter introducing useful results from the literature which help contextualize the original research in the thesis is presented first. This introductory chapter starts by surveying queueing results from probability theory and operations research. Then it covers a few seminal papers on strategic queueing, mostly but not exclusively from the economics literature. These cover issues of individual and social welfare in the context of First Come First Served (FCFS) and Equitable Processor Sharing (EPS) queues, with one or multiple servers, as well as a discussion of strategic interactions surrounding queue cutting. Then an overview of some important papers on the impact of queueing on competitive behaviour, mostly Industrial Organization economists, is presented. The first original chapter presents a model for the endogenous determination of the number of queues in an M/M/2 system. Customers arriving at a system where two customers are being served play a game, choosing between two parallel queues or one single queue. Subgame perfect equilibria are obtained, varying with customer characteristics and game specifications. With risk neutrality and when jockeying is not permitted, a single queue is an equilibrium, as is two queues. With risk neutrality and jockeying allowed, there is a unique two queue equilibrium. With risk aversion and no jockeying, there is a unique single queue equilibrium, and with risk aversion and jockeying, the equilibrium depends on the magnitude of risk aversion. The second chapter analyses the individual decisions taken by consumers when deciding whether to join an M/M/1 queue where a subset of customers who interact repeatedly can both cut the queue and be overtaken once they join, by-passing occasional users. This is shown to be an equilibrium in repeated games for sufficiently patient customers. The expected sojourn time for customers under this discipline is described as a solution of a system of difference equations, and this is then used to obtain a threshold joining strategy for arrivals, which is independent of the number of regular customers in the queue, as regulars form a sub-queue under the LCFS discipline. Numerical methods are then employed to contrast sojourn times and thresholds with the equilibrium for a strict First Come First Served queueing discipline, and with the socially optimal joining rule. Finally, the third chapter describes a duopoly market for healthcare where one of the two providers is publicly owned and charges a price of zero, while the other sets a price so as to maximize its profit. Both providers are subject to congestion in the form of an M/M/1 queue, and they serve patient-customers with randomly distributed unit costs of time. Consumer demand (as market share) for both providers is obtained and described with its full complement of comparative statics. The private provider’s pricing decision is explored, and equilibrium existence is proven. Social welfare functions are described and the welfare maximizing condition obtained. Numerical simulations with uniform and Kumaraswamy distributions are performed for several parameter values, showcasing the pricing provider’s decision and its relationship with social welfare.

Electricity Markets are paramount to the economy of any country and therefore lie at the foundation of society. These markets are usually very complex when compared to traditional financial markets due to the physical nature of the asset traded, difficulty of storage and distribution. Supply and demand balancing, network constraints, renewable energy influx, desire of participants to maximise their own profits, their risk aversion, fuel costs required for production, and the market clearing mechanism, do not exhaust the list of factors that influence the market outcome, but are perhaps the most important ones. The market outcome includes the prices and quantities allocated whose understanding is of great importance for market regulators and market participants alike. This work is focused on improving the fundamental understanding of the Spot Electricity Markets which lie at the core of Electricity Trading and represent the majority of trading volume. In particular we focus on Day Ahead Auctions which represent the vast majority of Spot Electricity trading, due to the difficulty of storing electricity, coupled with uncertainty in demand and production patterns. Every market has its own peculiarities and, we consider as a case study the Central Western European (CWE) Day Ahead Auction (DAA) for the period of 01/01/2019−31/12/2019. The Central Western European market includes Austria, Belgium, Germany, France and the Netherlands. Following an introductory chapter, due to the lack of full and complete network constraints historical data, Chapter 2 is focused on the reconstruction of historical network constraints, that are a key input in any fundamental model considering the electricity grid's structure. Further, network constraints may impose price decoupling between countries, which is of great interest to practitioners, academics and regulators. The task is very challenging due to the input data being very large and sparse. We reconstruct the network constraints data, known as the Power Transmission Distribution Factors (PTDFs) and Remaining Available Margins (RAMs), by first recovering the underlying time dependent signals known as the Generation Shift Keys (GSKs) and Phase Angles (PAs), and the electricity grid characteristics, via a mathematical optimisation problem that is solved by exploiting problem structure. The second step maps GSKs and PAs to the network constraints via the electricity grid characteristics. Our reconstruction achieves good in- and out-of- sample relative errors when compared to a naive approach. With the network constraints available, and by obtaining the cost and capacity characteristics of suppliers, in Chapter 3 we formulate a fundamental model to resolve for the zonal prices and quantities assigned to each participant, based on a simplification of the CWE market clearing mechanism, known as the Social Welfare Maximisation Problem (SWM). We also propose a novel market clearing mechanism which we call the Total Cost Minimisation Problem, because as we show, the prices are generally much lower and the total cost of supplying electricity is guaranteed to be lower by definition. Solving the Cost Minimisation problem is more challenging than solving the SWM, due to zonal prices appearing as explicit variables, but we obtain strong (but partial) analytical results to aid numerical solutions and provide efficient numerical algorithms. For both clearing mechanisms, demand is considered as inflexible, and producers bid marginal prices linear in the quantities produced. Since as expected, the SWM better represents the target data, this is further used as the market clearing mechanism. We consider the case when producers truthfully bid (TB) their cost curves, which is usually assumed by the regulators and many academic papers. However, we also consider the case of players trying to maximise their own profit, tand thus forming a Game Theoretic (GT) framework. For our CWE case study, both GT and TB models generally give an accurate representation of the actual price outcomes. Further, we define a method based on simple hypothesis testing to identify if and when the players are bidding strategically (gaming). We show that in fact, while for a large majority of times we cannot say with high confidence whether the players are bidding strategically or bidding truthfully, the number of times we are confident that players are gaming is much higher than the number of times we are confident that the players are bidding truthfully. Our results show that, in general, strategic bidding appears to be especially pronounced at peak demand hours: between 8am − 1pm and 5pm − 9pm. A different regime, where renewable energy influx appears to dominate the price action is also identified and this effect is generally more pronounced at off-peak morning hours (0am − 6am). Our model can thus be used as a fundamental approach for market outcome and price prediction, understanding the impact various fundamental factors on the price, understanding of producers' behaviour, and identifying if and when players are not bidding truthfully. These are all of interest to academics, market participants, and regulators.

We present in this thesis three distinct experiments, studying issues in behavioural economics and finan- cial market. In the first paper, we study the level-k reasoning model in an experimental extension of Arad and Rubinsten (2012) “11-20 Money Request Game”. In the second paper, we introduce an experimental design where traders can buy or sell the rights for performing complex decisional task. The design seeks to test the allocative efficiency of markets. In the third paper, we introduce an Arrow-Debreu market where traders have diverse and partial information about the true state of nature. The design seeks to test the Rational Expectations model’s prediction that all relevant information will be aggregated into market prices.

Criminology is a multidisciplinary science, and as criminologists, we take pride in that despite the complexities it might cause in the field. I make use of that multidisciplinarity in this dissertation by bringing together the knowledge from neuroscience, evolutionary biology, and behavioural economics to shed light on one of the most unlikely explanatory mechanisms of crime: cooperation. Humans are unique cooperators: we exchange resources and help one another in a time of need. The tendencies central to understanding the mechanics of cooperation and most useful in explaining crime are retribution and reciprocity (Bowles & Gintis, 2011). In order to test these tendencies, I organise them into a Retribution and Reciprocity Model (RRM). RRM is based on the understanding that people possess different levels of negatively reciprocal, positively reciprocal, and retributive tendencies. These tendencies interact with the individual's perceptions of the environment and elicit a response that may or may not result in a crime. This dissertation is devoted to presenting, explaining, and testing this theory. First, I synthesize everything we know about retribution and reciprocity to bring both concepts into one testable model with a mechanism of action: RRM. Second, I develop the methods to study RRM using hypothetical scenarios, a decision-making game adapted from the field of behavioural economics, as well as a psychometric inventory. Third, I use these methods to examine and test RRM as a model and learn that people are retributive and reciprocal; and that these tendencies can explain criminal behaviours. Through three separate papers we gain a full understanding of what RRM is, how it can be studied, and how it can contribute to the field of criminology. Therefore, future research can easily pick it up and integrate it with other theories of crime in order to enhance our understanding of the "black box" of human decision-making.

Cooperation presents evolutionary theory with an interesting puzzle: why should an actor help a recipient? Evolutionary explanations of cooperation rely on finding ways through which cooperative behaviour benefits the actor, by considering the selection on a gene for cooperation. A critical variable is the relatedness between the actor and the recipient, which determines the probability that they share the gene for cooperation. Consequently, a classic expectation is that an actor should only cooperate on the condition that the relatedness between the actor and the recipient ensures a net gain for the gene for cooperation. However, such conditional cooperation has been dismissed as an unimportant part of the evolutionary theory of cooperation because the simpler explanation of unconditional cooperation is usually sufficient. The scepticism of the relevance of conditional cooperation is often based on two premises: first there is very little evidence of its importance, and second conditional cooperation lacks a plausible mechanism for its operation and persistence. In this thesis by publication, I provide a rebuttal using experimental evidence of conditional cooperation in the social amoeba Dictyostelium discoideum, developing theoretical models to examine the possible mechanisms for conditional cooperation and comparatively situating these arguments within the broader context of other study systems. Using five papers (and a comment on each), I present the case that conditional cooperation should not be so easily dismissed, as it seems likely to be a more important part of the evolutionary explanation of cooperation in nature than current evidence might suggest.

This dissertation studies firms' strategic interactions in anticipation of random service disruption following technology failure. In particular it is aimed at understanding how contracting decisions between a vendor and one or multiple clients affect the firms' subsequent decisions to ensure disruption response and recovery are managed as efficiently as possible. This dissertation consists of three studies that were written as standalone papers seeking to contribute to the literature on contract design and technology management in operations management. Together, the three studies justify the importance of structuring the right incentives to mitigate disruption risks. In the first study we contribute to this literature by means of an analytical model which we use to examine how a client and vendor should balance investments in response capacity when both parties' efforts are critical in resolving disruption and each may have different risk preferences. We study the difference in the client's optimal expected utility between a case in which investment in response capacity is observable and a case in which it is not and refer to the difference in outcomes between the two cases as the cost of complexity. Firstly, we show that the cost of complexity to the client is decreasing in the risk aversion of vendor but increasing in her own risk aversion. Secondly, we find that a larger difference in risk aversion between a client and vendor leads to underinvestment in system uptime in case the client's investment is observable, yet the opposite happens when the client’s investment is not observable. In the second study we further examine the context of the first study through a controlled experiment. We examine how differences in risk aversion and access to information on a contracting partner’s risk preferences interact in affecting contracting and investment decisions between the client and vendor. Comparing subject decisions with the conditionally optimal benchmarks we arrive at two observations that highlight possible heuristic decision biases. Firstly, subjects tend to set and hold on to an inefficiently high investment level even though it is theoretically optimal to adjust decisions under changing differences in risk preferences. Secondly, subjects tend to set and hold on to a penalty that is too high when interacting with more risk averse vendors and too low in case the vendor is equally risk averse. Furthermore, cognitive feedback on the vendor’s risk aversion appears to have counterproductive effects on subject’s performance in the experiment, suggesting cognitive overload can have a reinforcing effect on the heuristic decision biases observed. In the third study we construct a new analytical model to examine the effect of contract design on a provider's response capacity allocation in a setting where multiple clients may be disrupted and available response capacity is limited. The results show that while clients may be incentivized to identify and report network disruptions, competition for scarce emergency resources and the required investment in understanding their own exposure may incentivize clients to deliberately miscommunicate with the vendor.

The subject of this study is the period of independent banking in Cornwall, from the formation of the Miners’ Bank in Truro in 1771 to the absorption of Dingley’s Launceston Bank by the National Provincial in 1922. Undertaken within the perspectives of the `New’ Cornish Studies, it aims to provide an assessment of the objectives, strategies, and operational decision-making of banking institutions in Cornwall. A comprehensive analytical narrative of their development forms the core of the study, building on the existing literature and augmented from a range of fragmentary primary and secondary sources, much of it from family archival papers. The nature of this material, and the general lack of quantitative financial data relating to individual institutions, has made a qualitative sociological approach the most appropriate. With the careers of individual bankers predominant, the narrative is also strongly biographical in content and emphasis. An analytical technique based on thick description has been used to enlarge upon the possibilities contained in the often meagre evidence. Both the historical narrative and the subsequent theoretical analysis are conducted from a standpoint situated within a Cornish bank; established in Geertzian fashion from the author’s own long commercial experience in a traditionally-minded business. This experience is aligned with that of contemporaneous writers on nineteenth-century banking practice. In similar manner, a theoretical standpoint within the contemporaneous sociological thought of Tönnies and Weber has been adopted, as being the most appropriate to the consideration of the forms of organization under investigation. From this standpoint, the analysis is projected forwards into the growing corporatism and branch expansion of the amalgamation era. This is undertaken through a game-theoretic evolutionary assessment of decision processes; and a consideration of the roles of path creation and path dependency in institutional development.

Financial contagion refers to a scenario in which small shocks, which initially affect only a few financial institutions or a particular region of the economy, spread to the rest of the financial sector and other countries whose economies were previously healthy. This resembles the “transmission” of a medical disease. Financial contagion happens both at domestic level and international level. At domestic level, usually the failure of a domestic bank or financial intermediary triggers transmission by defaulting on inter-bank liabilities, selling assets in a fire sale, and undermining confidence in similar banks. An example of this phenomenon is the failure of Lehman Brothers and the subsequent turmoil in the US financial markets. International financial contagion happens in both advanced economies and developing economies, and is the transmission of financial crises across financial markets. Within the current globalise financial system, with large volumes of cash flow and cross-regional operations of large banks and hedge funds, financial contagion usually happens simultaneously among both domestic institutions and across countries. There is no conclusive definition of financial contagion, most research papers study contagion by analyzing the change in the variance-covariance matrix during the period of market turmoil. King and Wadhwani (1990) first test the correlations between the US, UK and Japan, during the US stock market crash of 1987. Boyer (1997) finds significant increases in correlation during financial crises, and reinforces a definition of financial contagion as a correlation changing during the crash period. Forbes and Rigobon (2002) give a definition of financial contagion. In their work, the term interdependence is used as the alternative to contagion. They claim that for the period they study, there is no contagion but only interdependence. Interdependence leads to common price movements during periods both of stability and turmoil. In the past two decades, many studies (e.g. Kaminsky et at., 1998; Kaminsky 1999) have developed early warning systems focused on the origins of financial crises rather than on financial contagion. Further authors (e.g. Forbes and Rigobon, 2002; Caporale et al, 2005), on the other hand, have focused on studying contagion or interdependence. In this thesis, an overall mechanism is proposed that simulates characteristics of propagating crisis through contagion. Within that scope, a new co-evolutionary market model is developed, where some of the technical traders change their behaviour during crisis to transform into herd traders making their decisions based on market sentiment rather than underlying strategies or factors. The thesis focuses on the transformation of market interdependence into contagion and on the contagion effects. The author first build a multi-national platform to allow different type of players to trade implementing their own rules and considering information from the domestic and a foreign market. Traders’ strategies and the performance of the simulated domestic market are trained using historical prices on both markets, and optimizing artificial market’s parameters through immune - particle swarm optimization techniques (I-PSO). The author also introduces a mechanism contributing to the transformation of technical into herd traders. A generalized auto-regressive conditional heteroscedasticity - copula (GARCH-copula) is further applied to calculate the tail dependence between the affected market and the origin of the crisis, and that parameter is used in the fitness function for selecting the best solutions within the evolving population of possible model parameters, and therefore in the optimization criteria for contagion simulation. The overall model is also applied in predictive mode, where the author optimize in the pre-crisis period using data from the domestic market and the crisis-origin foreign market, and predict in the crisis period using data from the foreign market and predicting the affected domestic market.

The epistemic program in game theory uses formal models of interactive reasoning to provide foundations for various game-theoretic solution concepts. Much of this work is based around the (static) Aumann structure model of interactive epistemology, but more recently dynamic models of interactive reasoning have been developed, most notably by Stalnaker (Economics and Philosophy 1996) and Battigalli and Siniscalchi (Journal of Economic Theory 1999), and used to analyze rational play in extensive form games. But while the properties of Aumann structures are well un- derstood, without a formal language in which belief and belief revision statements can be expressed, it is unclear exactly what are the properties of these dynamic models. In chapter 1, "Dynamic In- teractive Epistemology", we investigate this question by defining such a language. A semantics and syntax are presented, with soundness and completeness theorems linking the two. Chapter 2, "Algorithmic Characterization of Ratioalizability in Extensive Form Games", uses the framework of chapter 1 to construct a dynamic epistemic model for extensive form games, which generates a hierarchy of beliefs for each player over her opponents' strategies and beliefs, and tells us how those beliefs will be revised as the game proceeds. We use the model to analyze the implications of the assumption that the players possess common (true) belief in rationality, thus extending the concept of rationalizability to extensive form games. Chapter 3, "The Equivalence of Bayes and Causal Rationality in Games", takes as its starting point a seminal paper of Aumann (Econometrica 1987), which showed how the choices of rational players could be analyzed in a unified state space framework. His innovation was to include the choices of the players in the description of the states, thus abolishing Savage's distinction between acts and consequences. But this simplification comes at a price: Aumann's notion of Bayes ratio­ nality does not allow players to evaluate what would happen were they to deviate from their actual choices. We show how the addition of a causal structure to the framework enables us to analyze such counterfactual statements, and use it to introduce a notion of causal rationality. Under a plausible causal independence condition, the two notions are shown to be equivalent. If we are prepared to accept this condition we can dispense with the causal apparatus and retain Aumann's original framework. In chapter 4, "The Deception of the Greeks", it is argued that the standard model of an extensive form game rules out an important phenomenon in situations of strategic interaction: deception. Using examples from the world of ancient Greece and from modern-day Wall Street, we show how the model can be generalized to incorporate this phenomenon. Deception takes place when the action observed by a player is different from the action actually taken. The standard model does allow imperfect information (modeled by non-singleton information sets), but not deception: the actual action taken is never ruled out. Our extension of extensive form games relaxes the assumption that the information sets partition the set of nodes, so that the set of nodes considered possible after a certain action is taken might not include the actual node. We discuss the implications of this relaxation, and show that in certain games deception is inconsistent with common knowledge of rationality even along the backward induction path.