Exotic Preferences for Macroeconomists

David Backus, Bryan Routledge, Stanley Zin

NBER Working Paper No. 10597
Issued in June 2004
NBER Program(s):   EFG   AP

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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Document Object Identifier (DOI): 10.3386/w10597

Published: Exotic Preferences for Macroeconomists, David K. Backus, Bryan R. Routledge, Stanley E. Zin. in NBER Macroeconomics Annual 2004, Volume 19, Gertler and Rogoff. 2005

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