Exotic Preferences for Macroeconomists

65 Pages Posted: 8 Jul 2004 Last revised: 17 Dec 2022

See all articles by David K. Backus

David K. Backus

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

Bryan Routledge

Carnegie Mellon University - David A. Tepper School of Business

Stanley E. Zin

Carnegie Mellon University; National Bureau of Economic Research (NBER)

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Date Written: June 2004

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.

Suggested Citation

Backus, David K. and Routledge, Bryan R. and Zin, Stanley E., Exotic Preferences for Macroeconomists (June 2004). NBER Working Paper No. w10597, Available at SSRN: https://ssrn.com/abstract=561044

David K. Backus (Contact Author)

NYU Stern School of Business (deceased)

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Bryan R. Routledge

Carnegie Mellon University - David A. Tepper School of Business ( email )

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(412) 268-7064 (Fax)

Stanley E. Zin

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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