Recursive Preferences

10 Pages Posted: 12 Dec 2005

See all articles by David K. Backus

David K. Backus

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

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Date Written: December 2005

Abstract

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

JEL Classification: D81, D91, E1, G12

Suggested Citation

Backus, David K., Recursive Preferences (December 2005). Available at SSRN: https://ssrn.com/abstract=868531 or http://dx.doi.org/10.2139/ssrn.868531

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