We study collective decisions by time-discounting individuals choosing a common consumption stream. We show that with …

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 …

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 …