This paper proposes a comparative statics analysis for precautionary effort via Eeckhoudt and Schlesinger (2006)'s harms disaggregation idea. Within an expected-utility framework, we show that prudence alone implies precautionary effort.
|Title of host publication||Proceedings of 2014 China International Conference On Insurance And Risk Management|
|Publisher||Tsinghua University Press|
|Number of pages||5|
|Publication status||Published - 1 Jan 2015|
Bibliographical notePaper presented at the 5th China International Conference on Insurance and Risk Management (CICIRM), Jul 23-26, 2014, Shenzhen, China.
ISBN of the source publication: 9787893952586
WANG, J., & LI, J. (2015). When can harms disaggregation imply precautionary effort? In Proceedings of 2014 China International Conference On Insurance And Risk Management (pp. 596-600). Tsinghua University Press.