Prudence Demands Conservatism

Prudence with Multiplicative Risk

On multivariate prudence

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 e¤ect of uncertainty on the marginal propensity to consume out of wealth, and the Drèze-Modigliani substitution e¤ect in this multivaria...

Balance sheet conservatism and audit reporting conservatism

1Division of Accounting, School of Business, NanyangBusiness School, Nanyang Technological University, Singapore 2Leventhal School of Accounting,Marshall School of Business, University of SouthernCalifornia, USA Correspondence Clive Lennox, Leventhal School ofAccounting, Marshall School ofBusiness,University of SouthernCalifornia, 3670TrousdaleParkway, Los Angeles,CA90089,USA. Email: clennox@us...

Prudence with respect to ambiguity

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 de nitions of prudence and of higher order risk preferences. The present paper proposes a similar de nition for prudence with respect to ambiguity, i.e., situations in which objective probabilit...

Conservatism, Liberalism and Nationalism:

SCIENCE CONTINUES It was no just in relationship to commerce, industry and social welfare, however, that the great scientific achievements of the nineteenth century had an impact. By this time the perspectives of the Enlightenment had so affected both philosophy and science that the climate was more favorable than ever for asking totally new kinds of questions and for challenging old assumption...