Even (Mixed) Risk Lovers Are Prudent
- (pp. 1529-35)
AbstractThe purpose of this note is to analyze properties of the risk loversâ€™ utility function beyond the positive sign of its second order derivative. We show thatâ€“â€“contrarily to a priori beliefsâ€“â€“risk lovers are prudent and are willing to accumulate precautionary savings.
CitationCrainich, David, Louis Eeckhoudt, and Alain Trannoy. 2013. "Even (Mixed) Risk Lovers Are Prudent." American Economic Review, 103 (4): 1529-35. DOI: 10.1257/aer.103.4.1529
- D81 Criteria for Decision-Making under Risk and Uncertainty