65 Pages Posted: 8 Jul 2004
Date Written: June 2004
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.
Suggested Citation: Suggested Citation
Backus, David K. and Routledge, Bryan and Zin, Stanley E., Exotic Preferences for Macroeconomists (June 2004). NBER Working Paper No. w10597. Available at SSRN: https://ssrn.com/abstract=561044
By Andrew Abel