Division of the Humanities and Social Sciences California Institute of Technology Pasadena, California 91125 Testable Implications of Translation Invariance and Homotheticity: Variational, Maxmin, Cara and Crra Preferences

Online Appendix: Testable Implications of Translation Invariance and Homotheticity: Variational, Maxmin, Cara and Crra Preferences

Testable Implications of Translation Invariance and Homotheticity: Variational, Maxmin, CARA and CRRA preferences

We describe the observable content of some of the most widely used models of decision under uncertainty: models of translation invariant preferences. In particular, we characterize the models of variational, maxmin, CARA and CRRA utilities. In each case we present a revealed preference axiom that is satisfied by a dataset if and only if the dataset is consistent with the corresponding utility r...

New title: “Testing theories of financial decision making” Published in the Proceedings of the National Academy of Sciences, Volume 113, Number 15; April 12, 2016. TESTABLE IMPLICATIONS OF TRANSLATION INVARIANCE AND HOMOTHETICITY: VARIATIONAL, MAXMIN, CARA AND CRRA PREFERENCES

We provide revealed preference axioms that characterize models of translation invariant preferences. In particular, we characterize the models of variational, maxmin, CARA and CRRA utilities. In each case we present a revealed preference axiom that is satisfied by a dataset if and only if the dataset is consistent from the corresponding utility representation. Our results complement traditional...

Division of the Humanities and Social Sciences California Institute of Technology Pasadena, California 91125 Testable Implications of Exponential Discounting

We develop a behavioral axiomatic characterization of exponentially discounted utility (EDU) over consumption streams. Given is an individual agent’s behavior in the market: assume a finite collection of purchases across periods. We show that such behavior satisfies a “revealed preference axiom” if and only if there exists a EDU model (a discount rate per period and a concave utility function o...

Behavioral contagion during learning about another agent’s risk-preferences acts on the neural representation of decision-risk

Division of the Humanities and Social Sciences, California Institute of Technology, Pasadena, CA 91125; Faculty of Business and Economics, The University of Melbourne, Carlton, VIC 3010, Australia; Florey Institute of Neuroscience and Mental Health, The University of Melbourne, Parkville, VIC 3052, Australia; and Computation and Neural Systems, California Institute of Technology, Pasadena, CA 9...