Saving under Rank-Dependent Utility

Bleichrodt, Han; Eeckhoudt, Louis

doi:10.1007/s00199-003-0455-3

H. Bleichrodt (Han) and L. Eeckhoudt (Louis)

2005-02-01

Saving under Rank-Dependent Utility

Economic Theory , Volume 25 - Issue 2 p. 505- 511

In this note we use the rank-dependent utility (RDU) model to analyze saving decisions. The RDU model enables us to separate the effects of pessimism and optimism on saving from that of concavity of the utility function. While pessimism induces more saving, the importance of this effect is shown to depend upon properties of the utility function such as prudence and temperance.

Additional Metadata
Keywords	D81, concave functions, expected utility, prudence, rank-dependent utility, saving, saving & investment, temperance, utility theory (mathematical models)
JEL	Consumer Economics: Theory (jel D11)
Persistent URL	doi.org/10.1007/s00199-003-0455-3, hdl.handle.net/1765/10992
Journal	Economic Theory
Organisation	Erasmus School of Economics
Citation APA Style AAA Style APA Style Cell Style Chicago Style Harvard Style IEEE Style MLA Style Nature Style Vancouver Style American-Institute-of-Physics Style Council-of-Science-Editors Style BibTex Format Endnote Format RIS Format CSL Format DOIs only Format	Bleichrodt, H., & Eeckhoudt, L. (2005). Saving under Rank-Dependent Utility. Economic Theory, 25(2), 505–511. doi:10.1007/s00199-003-0455-3

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