TY - JOUR
AU - Farmer, Roger E., A.
AB - Abstract This paper presents a class of preferences that yield closed-form solutions to dynamic stochastic choice problems. These preferences are based on a set of axioms that were proposed by Kreps and Porteus. The Kreps-Porteus axioms allow one to separate an agent's attitudes to risk from his or her intertemporal elasticity of substitution. RINCE preferences have the properties of Risk Neutrality and Constant Elasticity of substitution. * An earlier version of this paper was circulated under the title “Closed Form Solutions to Dynamic Stochastic Choice Problems,” in May 1987. An earlier version with the current title was also circulated as University of Cambridge discussion paper #121. The current version is considerably modified from both of these previous incarnations, and it includes a substantial amount of new material as well as some corrections in earlier errors. I wish to thank, without implicating, Larry Epstein, Philippe Weil, and two anonymous referees—all of whom have provided valuable feedback. I also wish to acknowledge the kind support of the Risk Project at the University of Cambridge and the National Science Foundation under grant number SES 87 2243. This content is only available as a PDF. Copyright © 1990 by the President and Fellows of Harvard College and The Massachusetts Institute of Technology
TI - RINCE Preferences
JF - The Quarterly Journal of Economics
DO - 10.2307/2937818
DA - 1990-02-01
UR - https://www.deepdyve.com/lp/oxford-university-press/rince-preferences-SjZMwrvm96
SP - 43
EP - 60
VL - 105
IS - 1
DP - DeepDyve
ER -