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,...

We consider a dynamic economy in which agents are initially unaware of some risks. As awareness of these risks emerges, markets re-open so agents can re-optimize and purchase insurance. An inefficiency may nonetheless arise as the cost of insurance is not spread over time. This "savings mistake"...

This paper axiomatizes an intertemporal version of the maxmin expected‐utility model. It employs two axioms specific to a dynamic setting. The first requires that smoothing consumption across states of the world is more beneficial to the individual than smoothing consumption across time. Such...

We explore the set of preferences defined over temporal lotteries in an infinite horizon setting. We provide utility representations for all preferences that are both recursive and monotone. Our results indicate that the class of monotone recursive preferences includes Uzawa and risk-sensitive...