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Update five_preferences.md
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lectures/five_preferences.md

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where the last term is $\tilde \theta$ times the entropy of the worst-case probability distribution.
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## Multiplier preferences
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## Multiplier preferences
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A decision maker is said to have **multiplier preferences** when he ranks consumption plans $c$ according to
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- \theta \log \left(\sum_{j=1}^I \exp(- \theta^{-1} u(c_j) ) \pi_j \right) .
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$$ (tom13)
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## Risk-sensitive preferences
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## Risk-sensitive preferences
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Substituting $\hat m_i$ into $\sum_{i=1}^I \pi_i \hat m_i [ u(c_i) + \theta \log \hat m_i ]$ gives the indirect utility function
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The right side of equation {eq}`tom200` is a special case of **stochastic differential utility** preferences in which consumption plans are ranked not just by their expected utilities $\mu_u$ but also the variances $\sigma_u^2$ of their expected utilities.
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## Ex post Bayesian preferences
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## Ex post Bayesian preferences
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A decision maker is said to have **ex post Bayesian preferences** when he ranks consumption plans according to the expected utility function
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