Document Type
Journal article
Source Publication
Economics Letters
Publication Date
11-1-2011
Volume
113
Issue
2
First Page
147
Last Page
149
Publisher
Elsevier BV
Keywords
absolute prudence, self-protection, Skewness
Abstract
We re-examine the link between absolute prudence and self-protection activities. We show that the level of effort chosen by an agent with decreasing absolute prudence is larger than the optimal effort chosen by a risk-neutral agent if the degree of absolute prudence is less than a threshold that is utility-independent and empirically verifiable.
DOI
10.1016/j.econlet.2011.06.019
Print ISSN
01651765
E-ISSN
18737374
Publisher Statement
Copyright © 2011 Elsevier B.V.
Access to external full text or publisher's version may require subscription.
Additional Information
This paper is also available at the Social Science Research Network at http://ssrn.com/abstract=1639539.
Full-text Version
Accepted Author Manuscript
Language
English
Recommended Citation
Dionne, G., & Li, J. (2011). The impact of prudence on optimal prevention revisited. Economics Letters, 113(2), 147-149. doi: 10.1016/j.econlet.2011.06.019
