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Optimal Prevention with Possibilistic and Mixed Background Risk

Author

Listed:
  • Irina Georgescu

    (Department of Economic Informatics and Cybernetics, Academy of Economic Studies, Piaţa Romana No 6 R 70167, Oficiul Postal 22, Bucharest, Romania)

  • Ana María Lucia Casademunt

    (Department of Business Administration, Universidad Loyola Andalucia, Córdoba, Spain)

Abstract

In this paper, the effect of posibilistic or mixed background risk on the level of optimal prevention is studied. In the framework of five purely possibilistic or mixed models, necessary and sufficient conditions are found such that the level of optimal saving decreases or increases as a result of the actions of various types of background risk. This way our results complete those obtained by Courbage and Rey for some prevention models with probabilistic background risk.

Suggested Citation

  • Irina Georgescu & Ana María Lucia Casademunt, 2018. "Optimal Prevention with Possibilistic and Mixed Background Risk," New Mathematics and Natural Computation (NMNC), World Scientific Publishing Co. Pte. Ltd., vol. 14(01), pages 21-35, March.
    • Handle: RePEc:wsi:nmncxx:v:14:y:2018:i:01:n:s1793005718500035
    DOI: 10.1142/S1793005718500035
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    References listed on IDEAS

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