10 Pages Posted: 13 Oct 2008
Date Written: December 2005
We summarize the class of recursive preferences. These preferences fit naturally with recursive solution methods and hold the promise of generating new insights into familiar problems. Portfolio choice is used as an example.
Keywords: time preference, risk, uncertainty, ambiguity, robust control, temptation, dynamic consistency, hyperbolic discounting, precautionary saving, equity premium, risk sharing
Suggested Citation: Suggested Citation
Backus, David K. and Routledge, Bryan and Zin, Stanley E., Recursive Preferences (December 2005). NYU Working Paper No. EC-05-19. Available at SSRN: https://ssrn.com/abstract=1282544
By Nassim Taleb