Dynamically stable preferences |
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Authors: | Anna Gumen Andrei Savochkin |
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Affiliation: | 1. New York University, Department of Economics, 19 West 4th Street, 6th Floor, New York, NY 10012, United States;2. Collegio Carlo Alberto, Via Real Collegio, 30, 10024 Moncalieri (TO), Italy |
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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. |
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Keywords: | D81 |
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