On the precautionary motive for savings and prudence, in an EU and a NEU framework

Alain Chateauneuf, Ghizlane Lakhnati () and Eric Langlais
Additional contact information
Ghizlane Lakhnati: CERMSEM - CEntre de Recherche en Mathématiques, Statistique et Économie Mathématique - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

Post-Print from HAL

Abstract: In this paper, we deal with the basic two-period consumption saving problem where the first and second period consumption utility, respectively v is assumed to be concave as usually. Considering the usual assumption of identify of u and v, we show that prudence is fully characterized by the convexity of u' in the EU model. More interesting we prove that for the RDEU model, prudence is fully characterized by the convexity of u' and strong pesimism. The paper ends by showing that for a strong risk averse RDEU decision maker, strict pessimism allows local weak prudence, whatever the sign of u'''.

Keywords: strong risk aversion; RDEU model; EU model; pessimism; prudence and local weak prudence.; modèle EU; modèle RDEU; aversion forte pour le risque; pessimisme; prudence et prudence locale faible (search for similar items in EconPapers)
Date: 2005-04
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00194667
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published in 2005

Downloads: (external link)
https://shs.hal.science/halshs-00194667/document (application/pdf)

Related works:
Working Paper: On the precautionary motive for savings and prudence, in an EU and a NEU framework (2005)
Working Paper: On the precautionary motive for savings and prudence, in an EU and a NEU framework (2005)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-00194667

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().