Abstract
This letter develops a set of simple conditions under which an individual is willing to save an extra amount of money due to the presence of ambiguity concerning his second period wealth. This extra precautionary saving motive is naturally associated with the notion of ambiguity prudence.
Keywords
Ambiguity aversion; Non-expected utility; Uncertainty; Saving; Prudence;
JEL codes
- D81: Criteria for Decision-Making under Risk and Uncertainty
- D91: Intertemporal Household Choice • Life Cycle Models and Saving
- E21: Consumption • Saving • Wealth
Reference
Loïc Berger, “Precautionary saving and the notion of ambiguity prudence”, Economics Letters, Elsevier, vol. 123, n. 2, May 2014, pp. 248–251.
See also
Published in
Economics Letters, Elsevier, vol. 123, n. 2, May 2014, pp. 248–251