dc.contributor.author Aase, Knut K. dc.date.accessioned 2020-11-05T12:26:36Z dc.date.available 2020-11-05T12:26:36Z dc.date.issued 2020-10-30 dc.identifier.issn 1500-4066 dc.identifier.uri https://hdl.handle.net/11250/2686569 dc.description.abstract We address how recursive utility affects important results in the theory of economics of uncertainty and time, as compared to the standard model, where the focus is on dynamic models in discrete time. Several puzzles associated with the standard theory are less puzzling with recursive utility, even if this type of preference representation seems close to the standard one at first sight. An inconsistency with the axioms behind the standard, separable and additive expected utility representation is pointed out and extended to also be relevant for recursive utility. The basic difference from the standard model is that recursive utility allows a form of separation of consumption substitution from risk aversion. This also means that the timing of resolution of uncertainty matters. In dynamic models, however, this turns out to be a rather crucial step. en_US dc.language.iso eng en_US dc.publisher FOR en_US dc.relation.ispartofseries Discussion paper;13/20 dc.subject Recursive utility en_US dc.subject axioms en_US dc.subject scale invariance en_US dc.subject utility gradients en_US dc.subject the equity premium puzzle en_US dc.subject precautionary savings en_US dc.title Elements of economics of uncertainty and time with recursive utility en_US dc.type Working paper en_US dc.source.pagenumber 38 en_US
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