In this paper, we look at how the presence of other risks modifies the optimal level of prevention to protect against one risk. We carry out our analysis in a two-period framework and use various configurations of other risks defined either in the first or second period, as state-independent or...

This paper shows that the notions of prudence, temperance, edginess, and, more generally, risk apportionment of any degree are the consequences of the natural idea that the sensitivity to detrimental changes should decrease with initial wealth. In the setting of Epstein and Tanny (1980), this...