This paper explores the implications of a novel class of preferences for the behavior of asset prices. Following a suggestion by Marshall (1920), we entertain the possibility that people derive utility not only from consumption, but also from the very act of saving. These “saving-based”...

Bakshi and Chen (1996a) suggest that the spirit of capitalism affects stock prices by increasing society's aversion to risk. In this paper, I show that the way in which the spirit of capitalism impinges upon asset prices depends upon the interaction of impatience, willingness to substitute over...

We establish general conditions under which younger investors should invest a larger proportion of their wealth in risky assets than older ones. In the finite horizon dynamic setting, we show that such phenomenon, known as time diversification, can occur in the presence of human wealth, target...

In this paper we study the comparative statics of Nth degree stochastic dominance shifts in a large class of non-cooperative games. We consider symmetric equilibria as well as asymmetric equilibria in which the risk changes are idiosyncratic and not necessarily of the same stochastic order....