Closed-Form Solutions to Dynamic Stochastic Choice Problems

This paper introduces a parametric class of Kreps Porteus preferences that yield closed form solutions to dynamic stochastic choice problems. These preferences are applied to a simple stochastic macroeconomic model which relaxes the representative agent assumption. This example is designed to illustrate one of the many possible ways in which these preferences may be useful to both theoretical and applied researchers.


Issue Date:
May 05 1987
Publication Type:
Working or Discussion Paper
Record Identifier:
http://ageconsearch.umn.edu/record/268241
Language:
English
Total Pages:
23




 Record created 2018-02-13, last modified 2018-02-13

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