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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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    2. 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.
    3. 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.
    4. Christoph Heinzel & Richard Peter, 2021. "Precautionary motives with multiple instruments [Motifs de précaution en cas de multiples instruments]," Working Papers hal-03484875, HAL.
    5. 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).
    6. 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.

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