Prudence with Respect to Ambiguity
Bibliographic Data
| ID | 9718361 |
|---|---|
| Authors | Aurélien Baillon (0000-0002-0169-9760, Erasmus University Rotterdam, corresponding author) |
| Year | 2017 |
| Volume | 127 |
| Issue | 604 |
| Pages | 1731-1755 |
| Publication date | 2017-09-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/ecoj.12358 |
| OpenAlex | W2524512716 |
| Language | EN |
| Citations received | 4 |
| References cited | 54 |
Under expected utility, prudence is equivalent to a positive third derivative of utility and plays a crucial role in precautionary saving behaviour. Eeckhoudt and Schlesinger (2006) proposed behavioural definitions of prudence and of higher order risk preferences. The present article proposes a similar definition for prudence with respect to ambiguity, i.e. situations in which objective probabilities are not available. Implications for several ambiguity models are derived. Ambiguity prudence is implied by Hansen and Sargent’s (2001) multiplier preferences, empirically correlates with financial behaviour and plays a key role in prevention behaviour
Ambiguity · Derivative (finance · Economics · Epistemology · Expected utility hypothesis · Financial economics · Mathematical economics · Multiplier (economics · Order (exchange · Positive economics · Prudence · Computer Science · Decision-Making and Behavioral Economics · Finance · Financial Markets and Investment Strategies · Housing Market and Economics · Philosophy
Should rational socioeconomic agents attempt to exert ‘control’ over the evolution of their preference or behavioral parameters
On the predictions of cumulative prospect theory for third and fourth order risk preferences
The Reflection Effect for Higher-Order Risk Preferences
On the optimality of straight deductibles under smooth ambiguity aversion
Maxmin expected utility with non-unique prior
A Definition of Subjective Probability
Precautionary Saving in the Small and in the Large
A Smooth Model of Decision Making under Ambiguity
Subjective Probability and Expected Utility without Additivity
Saving and Uncertainty
Advances in prospect theory
Risk, Ambiguity, and the Savage Axioms
Attitude toward imprecise information
Optimal prevention and prudence in a two-period model
Market Insurance, Self-Insurance, and Self-Protection
The Effect of Ambiguity Aversion on Insurance and Self‐protection
| Citations per year | 1 |
|---|---|
| Citation span | 2022 - 2025 (4) |
| Highly cited | No |