Life-Cycle Preferences Revisited

Working Papers from ETH Zurich, Chair of Systems Design

Abstract: An axiomatic construction for lifecycle preferences accounting for the finiteness and the randomness of life duration is provided. We emphasise the role of intertemporal correlation aversion and explain why multiplication preferences provide an interesting alternative to additive preferences, allowing to separate risk aversion from intertemporal elasticity of substitution. Implications regarding the shape of the optimal consumption profiles are discussed.

Keywords: Intertemporal choice; Life-cycle models; Multivariate risk aversion; Uncertain lifetime (search for similar items in EconPapers)
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Related works:
Journal Article: LIFE-CYCLE PREFERENCES REVISITED (2013)
Working Paper: Life-Cycle Preferences Revisited (2011)
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