Precautionary Saving and the Notion of Ambiguity Prudence

This letter develops a set of simple conditions under which an individual iswilling to save an extra amount of money due to the presence of ambiguity onits second period wealth. This extra precautionary saving motive is naturallyassociated to the notion of ambiguity prudence.

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Year of publication:	2013-11
Authors:	Berger, Loïc
Institutions:	European Centre for Advanced Research in Economics and Statistics (ECARES), Solvay Brussels School of Economics and Management
Subject:	ambiguity aversion \| non-expected utility \| uncertainty \| saving \| prudence

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Extent:	application/pdf
Series:	Working Papers ECARES.
Type of publication:	Book / Working Paper
Notes:	Published by: The text is part of a series ECARES Working Papers Number ECARES 2013-42 11 pages long
Classification:	D81 - Criteria for Decision-Making under Risk and Uncertainty ; D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving ; E21 - Consumption; Saving
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011031494