This work shows that, in a two-period framework, prudence has a positive effect on optimal prevention. This conclusion is the opposite to that obtained in a one-period framework [Eeckhoudt L., Gollier C., 2005. The impact of prudence on optimal prevention. Economic Theory 26, 989-994]. This is due to the opposite effect of prevention on wealth in the period where the risk occurs.

Optimal prevention and prudence in a two-period model / Menegatti, Mario. - In: MATHEMATICAL SOCIAL SCIENCES. - ISSN 0165-4896. - 58:(2009), pp. 393-397. [10.1016/j.mathsocsci.2009.07.001]

Optimal prevention and prudence in a two-period model

MENEGATTI, Mario
2009-01-01

Abstract

This work shows that, in a two-period framework, prudence has a positive effect on optimal prevention. This conclusion is the opposite to that obtained in a one-period framework [Eeckhoudt L., Gollier C., 2005. The impact of prudence on optimal prevention. Economic Theory 26, 989-994]. This is due to the opposite effect of prevention on wealth in the period where the risk occurs.
2009
Optimal prevention and prudence in a two-period model / Menegatti, Mario. - In: MATHEMATICAL SOCIAL SCIENCES. - ISSN 0165-4896. - 58:(2009), pp. 393-397. [10.1016/j.mathsocsci.2009.07.001]
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11381/2286329
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