This paper presents a unified treatment for the analysis of two-argument utility functions with a random budget constraint. The way in which changes in both additive and multiplicative risk affect optimal choices has been analyzed prov iding intuitive economic explanations to third order...

This article describes a large-scale experimental investigation (using 128 subjects) into opt imal dynamic consumption behavior under income uncertainty. Payment w as linked to performance; nevertheless behavior departed significantl y from optimal behavior. The main focus of the research was on...