Exotic Preferences for Macroeconomists

NYU Stern Working Paper No. EC-04-20

Posted: 12 Sep 2004

See all articles by David K. Backus

David K. Backus

NYU Stern School of Business; National Bureau of Economic Research (NBER)

Multiple version iconThere are 4 versions of this paper

Date Written: June 18, 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.

Keywords: Time preference, risk, uncertainty, ambiguity, robust control, temptation, dynamic consistency

JEL Classification: D81, D91, E1, G12

Suggested Citation

Backus, David K., Exotic Preferences for Macroeconomists (June 18, 2004). NYU Stern Working Paper No. EC-04-20. Available at SSRN: https://ssrn.com/abstract=587962

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