Dynamically stable preferences

Anna Gumen and Andrei Savochkin

Journal of Economic Theory, 2013, vol. 148, issue 4, 1487-1508

Abstract: In the framework of dynamic choice under uncertainty, we define dynamic stability as a combination of two assumptions prevalent in the literature: dynamic consistency and the requirement that updated preferences have the same “structure” as ex ante ones. Dynamic stability also turns out to be a defining characteristic of the multiplier preferences of Hansen and Sargent (2001) [24] within the scope of variational preferences. Generally, for any class of invariant preferences, dynamic stability is shown to be connected to another independent property — consequentialism.

Keywords: Dynamic consistency; Dynamic stability; Ambiguity; Invariance; Consequentialism; Multiplier preferences (search for similar items in EconPapers)
JEL-codes: D81 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Working Paper: Dynamically Stable Preferences (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:148:y:2013:i:4:p:1487-1508

DOI: 10.1016/j.jet.2013.04.018

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