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Lattice-based monotone comparative statics on saving with Selden/Kreps–Porteus preferences

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  • Wang, Jianli
  • Li, Jingyuan

Abstract

This study examines saving with general Selden/Kreps–Porteus preferences. It shows that lattice-based monotone comparative statics can be used to weaken the existing sufficient conditions in a two-period model with Kreps–Porteus preferences for prudence and for a definitive relationship between risk aversion and the strength of the saving motive. The effects of a change in risk and a change in initial wealth are also examined.

Suggested Citation

  • Wang, Jianli & Li, Jingyuan, 2016. "Lattice-based monotone comparative statics on saving with Selden/Kreps–Porteus preferences," Journal of Mathematical Economics, Elsevier, vol. 65(C), pages 132-138.
    • Handle: RePEc:eee:mateco:v:65:y:2016:i:c:p:132-138
    DOI: 10.1016/j.jmateco.2016.06.004
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    Cited by:

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    3. Heinzel, Christoph & Peter, Richard, 2021. "Precautionary motives with multiple instruments," Working Papers 316521, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    4. Wang, Jianli & Wang, Hongxia & Yick, Ho Yin, 2019. "How do changes in risk and risk aversion affect self-protection with Selden/Kreps–Porteus preferences?," Insurance: Mathematics and Economics, Elsevier, vol. 88(C), pages 1-6.
    5. Bar Light, 2018. "Precautionary Saving in a Markovian Earnings Environment," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 29, pages 138-147, July.
    6. Heinzel, Christoph & Peter, Richard, 2023. "Precaution with multiple instruments: The importance of substitution effects," Journal of Economic Behavior & Organization, Elsevier, vol. 207(C), pages 392-412.

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