Precautionary Effort: A New Look

6 Pages Posted: 24 May 2012

See all articles by Louis R. Eeckhoudt

Louis R. Eeckhoudt

affiliation not provided to SSRN

Rachel J. Huang

National Central University at Taiwan - Department of Finance; Graduate Institute of Finance, NTUST

Larry Y. Tzeng

National Taiwan University - Department of Finance

Date Written: June 2012

Abstract

While the concept of precautionary saving is well documented, that of precautionary effort has received relatively limited attention. In this note, we set up a two period model in order to analyze the conditions under which the introduction (or deterioration) of an independent background risk increases effort.

Suggested Citation

Eeckhoudt, Louis R. and Huang, Rachel J. and Tzeng, Larry, Precautionary Effort: A New Look (June 2012). Journal of Risk and Insurance, Vol. 79, Issue 2, pp. 585-590, 2012. Available at SSRN: https://ssrn.com/abstract=2065692 or http://dx.doi.org/10.1111/j.1539-6975.2011.01441.x

Louis R. Eeckhoudt

affiliation not provided to SSRN ( email )

Rachel J. Huang

National Central University at Taiwan - Department of Finance ( email )

No. 300, Jhongda Rd, Jhogli City, Taoyuan, Taiwan,
Jhongli, TY 32001
Taiwan

Graduate Institute of Finance, NTUST ( email )

#43,Sec.4
Keelung Rd
Taipei, Taipei 106
Taiwan

Larry Tzeng

National Taiwan University - Department of Finance ( email )

1 Sec. 4, Roosevelt Road
Taipei, 106
Taiwan

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