Exotic Preferences for Macroeconomists
|Keywords:||time preference;risk;uncertainty;ambiguity;robust control;temptation;dynamic consistency;hyperbolic discounting;precautionary saving;equity premium;risk sharing|
|Abstract:||We provide a user’s guide to “exotic” preferences: nonlinear time aggregators, departures from expected utility, preferences over time with known and unknown probabilities, risk sensitive and robust control, “hyperbolic” discounting, and preferences over sets (“temptations”). We apply each to a number of classic problems in macroeconomics and finance, including consumption and saving, portfolio choice, asset pricing, and Pareto optimal allocations.|
|Appears in Collections:||Economics Working Papers|
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