The impact of prudence on optimal prevention revisited

Georges Dionne () and Jingyuan Li

Economics Letters, 2011, vol. 113, issue 2, 147-149

Abstract: We re-examine the link between absolute prudence and self-protection activities. We show that the level of effort chosen by an agent with decreasing absolute prudence is larger than the optimal effort chosen by a risk-neutral agent if the degree of absolute prudence is less than a threshold that is utility-independent and empirically verifiable.

Keywords: Absolute prudence; Self-protection; Skewness (search for similar items in EconPapers)
JEL-codes: D61 D81 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (26)

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Related works:
Working Paper: The Impact of Prudence on Optimal Prevention Revisited (2010)
Working Paper: The impact of prudence on optimal prevention revisited (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:113:y:2011:i:2:p:147-149

DOI: 10.1016/j.econlet.2011.06.019

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