The purpose of this paper is to study the optimal retirement and consumption/investment decisions of an infinitely lived agent who does not tolerate any decline in his/her consumption throughout his/her lifetime. The agent receives labor income but suffers disutility from working until...

We study the consumption and portfolio selection problem of a finitely lived agent who derives utility from the stock of durable goods. We show that the agent's effective relative risk aversion implied by the optimal portfolio tends to decline and approaches zero, as the planning horizon...

In this study, we generalize the results of Arun (2013) on the optimal consumption and investment problem of an infinitely lived agent who does not accept her consumption falling below a fixed proportion of her historically highest level, the so-called drawdown constraint on consumption. We...