-trivial violations of non-satiation and prudence. …

the literature on this question focused on risk aversion, we show that the concept of prudence (i.e., a positive third … derivative of the utility function) is essential to answer this question. We explain in this paper that prudence and prevention …

measure of prudence. These bounds are found through second-degree spreads of a transformation of the background risk. The … of terms involving absolute prudence and absolute temperance. Once a general set of necessary and sufficient conditions …

generate prudence before being transformed into risk-aversion. …

preferences. We show however that the required property is prudence,and prudence is consistent with DARA, IARA or CARA. …

the assumptions of non-satiation and bounded marginal utility, prudence implies risk aversion (imprudence implies risk … loving) and that temperance implies prudence (intemperance implies imprudence). The implications of these results for …

occurs, which influences the expected marginal utility of wealth. Using concepts of prudence (equivalently, downside risk … depends on risk aversion and prudence with respect to wealth. For the bivariate case (e.g., risk of death or illness), the … adjustment factor depends on risk aversion and cross-prudence in wealth. …