Time preference and capital asset pricing models

Yaacov Z. Bergman*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

30 Scopus citations

Abstract

Results of the theory of individual optimal consumption-investment choice under uncertainty are extended to a class of intertemporally dependent preferences for consumption streams. These results are then used to show that with intertemporally dependent preferences, which are more realistic than the separable time-additive preference structure, Merton's (1973) multi-beta intertemporal capital asset pricing model is still valid, but it can no longer be collapsed to Breeden's (1979) single consumption-beta model.

Original languageEnglish
Pages (from-to)145-159
Number of pages15
JournalJournal of Financial Economics
Volume14
Issue number1
DOIs
StatePublished - Mar 1985
Externally publishedYes

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