Assoc. Prof. Asen Kochov, Ph.D.

Decision Theory

Asen Kochov is a microeconomic theorist specializing in decision theory. The field focuses on uncovering the testable implications of specific models of human behavior. Mr. Kochov has made particular contributions to the study of ambiguity, intertemporal choice, and unawareness. In “Time and No Lotteries: An Axiomatization of Maxmin Utility,” he characterized the implications of ambiguity aversion for intertemporal decisions. In “A Behavioral Definition of Unforeseen Contingencies,” he showed how intertemporal decisions permit a distinction between aversion to ambiguity (unknown odds) and aversion to unforeseen contingencies (unknown possibilities), a previously open problem in the literature.

Mr. Kochov’s work aligns with several broader developments in economics: 1) a heightened interest in ambiguity and bounded rationality in fields such as macroeconomics and asset pricing, where intertemporal decisions are central; 2) a growing literature on unawareness; and 3) a nascent but influential experimental literature on intertemporal choice.

More recently, Kochov has branched out from decision theory. One game-theoretic paper studies the implications of general recursive preferences in repeated games, showing that sensitivity to intertemporal risk can profoundly influence game theory’s signature result – the folk theorem. A second, general-equilibrium paper investigates whether competitive markets can self-correct when agents become aware of previously unforeseen risks. Notably, while markets can handle unforeseen risks that are purely idiosyncratic, they may fail to reach an equilibrium when the risks are aggregate.

In his three CES Lectures, Recursive Utility: Theory and Applications, Mr. Kochov plans to introduce students to the main ideas and questions in these areas of research.

Asen Kochov is an Associate Professor in the Department of Economics of the University of Rochester. He was previously an Assistant Professor of Economics at Bonn University. His PhD in Economics is from the University of Rochester and his BA in Economics is from Sofia University, Bulgaria.