We propose an empirical implementation of the consumption-investment problem using the martingale representation … and probabilities, which generate variation in consumption, and the consumption smoothing induced by risk aversion. Using … options-implied information, we find quantitatively different optimal consumption and portfolio policies than those implied by …

that support any smooth consumption function. Our framework applies to individuals under a behavioral interpretation or to …

resource. They thus delegate decision making to a social planner who allocates consumption efficiently across heterogeneous … individuals and over time. We define `policy equivalent' representative agents as those agents whose optimal consumption plan … reproduces the optimal aggregate consumption plan of the group, and find conditions that must be satisfied by all such …

When solving discrete-time consumption models with present-biased time preferences, backwards induction generates …