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Exotic Preferences for Macroeconomists

In: NBER Macroeconomics Annual 2004, Volume 19

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  • David K. Backus
  • Bryan R. Routledge
  • Stanley E. Zin

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.

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This chapter was published in:

  • Mark Gertler & Kenneth Rogoff, 2005. "NBER Macroeconomics Annual 2004, Volume 19," NBER Books, National Bureau of Economic Research, Inc, number gert05-1.
    This item is provided by National Bureau of Economic Research, Inc in its series NBER Chapters with number 6672.

    Handle: RePEc:nbr:nberch:6672

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