School evaluation: Illusion and prudence

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...

Prudence, Emotional State, Personality, and Cognitive Ability

We report an experiment to consider the emotional correlates of prudent decision making. In the experiment, we present subjects with lotteries and measure their emotional response with facial recognition software. They then make binary choices between risky lotteries that distinguish prudent from imprudent individuals. They also perform tasks to measure their cognitive ability and a number of p...

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 ...

Connecting possibilistic prudence and optimal saving

— In this paper we study the optimal saving problem in the framework of possibility theory. The notion of possibilistic precautionary saving is introduced as a measure of the way the presence of possibilistic risk (represented by a fuzzy number) influences a consumer in establishing the level of optimal saving. The notion of prudence of an agent in the face of possibilistic risk is defined and ...