Precautionary Saving with Selden/Kreps-Porteus Preferences Revisited
14 Pages Posted: 24 Jun 2014 Last revised: 5 Jan 2015
Date Written: September 17, 2014
Abstract
This paper re-examines precautionary saving with general Selden/Kreps-Porteus preferences. The conditions existing in the literature are much more complex than in the Expected Utility framework. We obtain a simple and intuitive result on precautionary savings via disentangling time preference and risk preference effects.
Keywords: Precautionary saving; Prudence; Selden/Kreps-Porteus Preferences
JEL Classification: D81, D91, E21
Suggested Citation: Suggested Citation
Li, Jingyuan and Wang, Jianli, Precautionary Saving with Selden/Kreps-Porteus Preferences Revisited (September 17, 2014). Available at SSRN: https://ssrn.com/abstract=2458316 or http://dx.doi.org/10.2139/ssrn.2458316
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