NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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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