Affiliation:
1. Institute of Mathematics, and Federmann Center for the Study of Rationality, Hebrew University of Jerusalem
Abstract
This paper characterizes those preferences over bounded infinite utility streams that satisfy the time value of money principle and an additivity property, and the subset of these preferences that, in addition, are either impatient or patient. Based on this characterization, the paper introduces a concept of optimization that is robust to a small imprecision in the specification of the preference, and proves that the set of feasible streams of payoffs of a finite Markov decision process admits such a robust optimization.
Funder
Israel Science Foundation
Subject
General Economics, Econometrics and Finance
Cited by
2 articles.
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