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Life-Cycle Preferences Revisited

Author

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  • Antoine Bommier

Abstract

An axiomatic construction for lifecycle preferences accounting for the finiteness and the randomness of life duration is provided. We emphasize the role of intertemporal correlation aversion and explain why multiplica- tive preferences provide an interesting alternative to additive preferences, allowing to separate risk aversion from intertemporal elasticty of substitu- tion. Implications regarding the shape of the optimal consumption pro?files are discussed.
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Suggested Citation

  • Antoine Bommier, 2013. "Life-Cycle Preferences Revisited," Journal of the European Economic Association, European Economic Association, vol. 11(6), pages 1290-1319, December.
    • Handle: RePEc:bla:jeurec:v:11:y:2013:i:6:p:1290-1319
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    File URL: http://hdl.handle.net/10.1111/jeea.2013.11.issue-6
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    Citations

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    Cited by:

    1. Bagliano, Fabio C. & Fugazza, Carolina & Nicodano, Giovanna, 2019. "Life-cycle portfolios, unemployment and human capital loss," Journal of Macroeconomics, Elsevier, vol. 60(C), pages 325-340.
    2. Drouhin, Nicolas, 2020. "Non-stationary additive utility and time consistency," Journal of Mathematical Economics, Elsevier, vol. 86(C), pages 1-14.
    3. Fabio C. Bagliano & Carolina Fugazza & Giovanna Nicodano, 2017. "A Life-Cycle Model with Unemployment Traps," Working papers 041, Department of Economics, Social Studies, Applied Mathematics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.
    4. Antoine Bommier & Francois Le Grand, "undated". "A Robust Approach to Risk Aversion," Working Papers ETH-RC-13-002, ETH Zurich, Chair of Systems Design.
    5. Schernberg, Hélène, 2025. "Social genetic insurance: A life-cycle perspective," Journal of Health Economics, Elsevier, vol. 101(C).
    6. Bagliano, Fabio C. & Fugazza, Carolina & Nicodano, Giovanna, 2021. "Life-cycle welfare losses from rules-of-thumb asset allocation," Economics Letters, Elsevier, vol. 198(C).
    7. Hector, Svenja, 2015. "Extending the Ramsey Equation further: Discounting under Mutually Utility Independent and Recursive Preferences," VfS Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113061, Verein für Socialpolitik / German Economic Association.
    8. Gangadharan, Lata & Harrison, Glenn W. & Leroux, Anke D., 2019. "Are risks over multiple attributes traded off? A case study of aid," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 166-198.
    9. Antoine Bommier & François Le Grand, 2019. "Risk Aversion and Precautionary Savings in Dynamic Settings," Management Science, INFORMS, vol. 65(3), pages 1386-1397, March.
    10. Antoine Bommier & François Grand, 2014. "Too risk averse to purchase insurance?," Journal of Risk and Uncertainty, Springer, vol. 48(2), pages 135-166, April.
    11. Drouhin, Nicolas, 2015. "A rank-dependent utility model of uncertain lifetime," Journal of Economic Dynamics and Control, Elsevier, vol. 53(C), pages 208-224.
    12. Antoine Bommier, "undated". "Mortality Decline, Impatience and Aggregate Wealth Accumulation with Risk-Sensitive Preferences," Working Papers ETH-RC-14-006, ETH Zurich, Chair of Systems Design.
    13. Fillon, Romain & Guivarch, Céline & Taconet, Nicolas, 2023. "Optimal climate policy under tipping risk and temporal risk aversion," Journal of Environmental Economics and Management, Elsevier, vol. 121(C).
    14. Bommier, Antoine & Schernberg, Hélène, 2021. "Would you prefer your retirement income to depend on your life expectancy?," Journal of Economic Theory, Elsevier, vol. 191(C).
    15. Nicolas Drouhin, 2016. "Non stationary additive utility and time consistency," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01238584, HAL.
    16. Glenn W. Harrison, 2019. "The behavioral welfare economics of insurance," The Geneva Risk and Insurance Review, Palgrave Macmillan;International Association for the Study of Insurance Economics (The Geneva Association), vol. 44(2), pages 137-175, September.

    More about this item

    JEL classification:

    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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