The concept of prudence is nowadays almost as well accepted as that of risk aversion. We show that the concept of temperance deserves a similar status since it rests on the same basic ideas as the other two ones. The analysis also specifies the link which exists in the expected utility model...

The existing literature on savings, insurance, and portfolio choices under risk has revealed that quite often comparative statics results depend, among other things, upon the values of the coefficients of relative risk aversion and relative prudence. More specifically the benchmark values for...

This paper examines how priority setting in health care expenditures is influenced by the presence of uncertainty about the severity of the illness and the effectiveness of medical treatment. We provide necessary and sufficient conditions on social preferences under which a social planner will...