Recursive preferences have found widespread application in representative-agent asset-pricing models and general equilibrium. A majority of these applications exploit two decision-theoretic properties not shared by the standard model of intertemporal choice: (i) agents care about the...

The rate of time preference is traditionally defined as the marginal rate of substitution between current and future consumption. This definition is not applicable when outcomes are indivisible. Such is the case in all discrete-choice dynamic problems which arise, for example, in modeling...

A major theme in behavioral economics focuses on experimental evidence that individuals learn from the choice problems they face and consequently violate the consistency requirements of revealed preference theory. Despite the experimental evidence, the testable implications of such contextual...

The paper proposes a choice-theoretic de nition of an unforeseen event and a model of behavior that accommodates such events. The analysis presumes an individual who is aware of their unawareness, which explains why all un- foreseen events in this paper are non-null. Relative to existing work,...