In this paper we extend the theory of precautionary saving to the case in which uncertainty is multidimensional and we develop a matrix-measure of multivariate prudence. Furthermore, we characterize comparative prudence, decreasing and increasing prudence, the effect of uncertainty on the...

How should changes in environmental quality occurring in the future be discounted? To answer this question we consider a model of “ecological discounting,” where the representative consumer has a utility function defined over two attributes, consumption and environmental quality, which...