Risk-aversion and prudence in rent-seeking games

Relationships between Risk Aversion , Prudence , and Cautiousness

In this paper we investigate the relationships between prudence, risk aversion, and cautiousness. These three measures explain investors’ investment decisions in the money market, stock market, and option market respectively. Thus to understand how investors’ investment decisions in the three markets are related it is important to know the relationships between the three measures. We show that ...

Rent seeking games with tax evasion

We consider the static and dynamic models of Cournot duopoly with tax evasion. In the dynamic model we introduce the time delay and we analyze the local stability of the stationary state. There is a critical value of the delay when the Hopf bifurcation occurs. Mathematics Subject Classification: 34K18, 47N10; Jel Classification: C61, C62, H26

How Changing Prudence and Risk Aversion Affect Optimal Saving

We show how optimal saving in a two-period model is affected when prudence and risk aversion of the underlying utility function change. Increasing prudence alone will induce higher savings only if, for certain combinations of the interest rate and the pure time discount rate, there is distributional neutrality between the two periods. Otherwise, changes of risk aversion that affect the distribu...

Joint measurement of risk aversion , prudence and temperance

How Changing Prudence and Risk Aversion Affect Optimal Saving

We show how optimal saving in a two-period model is affected when prudence and risk aversion of the underlying utility function change. Increasing prudence alone will induce higher savings only if, for certain combinations of the interest rate and the pure time discount rate, there is distributional neutrality between the two periods. Otherwise, changes of risk aversion that affect the distribu...