This paper aims to provide a representation theorem for consumption stream in the simplex in continuous time, by using the weaker axiom of ”Agree with,” the strong axiom of ”Preferential Independence”, and the axioms of ”Separability” and ”Measurability” on the simplex,...

Discount is the difference between the face value of a bond and its present value. I propose an arbitrage-free dynamic framework for discount models, which provides an alternative to the Heath–Jarrow–Morton framework for forward rates. I derive general consistency conditions for factor...

Language has a strong influence on our perceptions of time and rewards. This raises the question of whether large language models, when asked in different languages, show different preferences for rewards over time and if their choices are similar to those of humans. In this study, we analyze...

We illustrate the strong implications of recursivity, a standard assumption in dynamic environments, on attitudes toward uncertainty. We show that in intertemporal consumption choice problems, recursivity always implies constant absolute ambiguity aversion (CAAA) when applying the standard...

This paper investigates a novel behavioral feature exhibited by recursive preferences: aversion to risks that are persistent through time. I introduce a formal notion of correlation aversion to capture this phenomenon and provide a characterization based on risk attitudes. Furthermore,...