Precautionary saving and the notion of ambiguity prudence (Q2452993)
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scientific article; zbMATH DE number 6301356
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| English | Precautionary saving and the notion of ambiguity prudence |
scientific article; zbMATH DE number 6301356 |
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Precautionary saving and the notion of ambiguity prudence (English)
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6 June 2014
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A simple two-period model is considered which is not only risky but also ambiguous. The probabilities of the second-period final wealth consist of a set of probabilities, depending on a parameter \(\theta\) for which the agent has prior beliefs. The concept of ambiguity prudence is introduced. The conditions for ambiguity prudence are considered, basically those related to ambiguity aversion.
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ambiguity aversion
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non-expected utility
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uncertainty
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saving
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prudence
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two-period model
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0.95366424
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0.9169305
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0.89423805
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0.8826665
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0.8767089
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0.87494975
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0.87061626
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0.8686273
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