Optimal Saving by Expected Utility Operators

This paper studies an optimal saving model in which risk is represented by a fuzzy number and the total utility function of the model is defined by an expected utility operator. This model generalizes some existing possibilistic saving models and from them, by a particularization, one can obtain new...

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Main Authors:	Irina Georgescu, Jani Kinnunen
Format:	Article
Language:	English
Published:	MDPI AG 2020-02-01
Series:	Axioms
Subjects:	expected utility operator possibilistic saving models precautionary saving
Online Access:	https://www.mdpi.com/2075-1680/9/1/17

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spelling	doaj-f98f56a0b2364fe397ca85198b50d0732020-11-25T03:32:40ZengMDPI AGAxioms2075-16802020-02-01911710.3390/axioms9010017axioms9010017Optimal Saving by Expected Utility OperatorsIrina Georgescu0Jani Kinnunen1Academy of Economic Studies, Department of Economic Cybernetics, Piaţa Romana No 6 R 70167, Oficiul Postal 22, 010552 Bucharest, RomaniaDepartment of Information Systems, Åbo Akademi University, Tuomiokirkkotori 3, 20500 Turku, FinlandThis paper studies an optimal saving model in which risk is represented by a fuzzy number and the total utility function of the model is defined by an expected utility operator. This model generalizes some existing possibilistic saving models and from them, by a particularization, one can obtain new saving models. In the paper, sufficient conditions are set for the presence of potential risk to increase optimal saving levels and an approximation formula for optimal saving is demonstrated. Particular models for a few concrete expected utility operators are analyzed for triangular fuzzy numbers and CRRA-utility functions.https://www.mdpi.com/2075-1680/9/1/17expected utility operatorpossibilistic saving modelsprecautionary saving
collection	DOAJ
language	English
format	Article
sources	DOAJ
author	Irina Georgescu Jani Kinnunen
spellingShingle	Irina Georgescu Jani Kinnunen Optimal Saving by Expected Utility Operators Axioms expected utility operator possibilistic saving models precautionary saving
author_facet	Irina Georgescu Jani Kinnunen
author_sort	Irina Georgescu
title	Optimal Saving by Expected Utility Operators
title_short	Optimal Saving by Expected Utility Operators
title_full	Optimal Saving by Expected Utility Operators
title_fullStr	Optimal Saving by Expected Utility Operators
title_full_unstemmed	Optimal Saving by Expected Utility Operators
title_sort	optimal saving by expected utility operators
publisher	MDPI AG
series	Axioms
issn	2075-1680
publishDate	2020-02-01
description	This paper studies an optimal saving model in which risk is represented by a fuzzy number and the total utility function of the model is defined by an expected utility operator. This model generalizes some existing possibilistic saving models and from them, by a particularization, one can obtain new saving models. In the paper, sufficient conditions are set for the presence of potential risk to increase optimal saving levels and an approximation formula for optimal saving is demonstrated. Particular models for a few concrete expected utility operators are analyzed for triangular fuzzy numbers and CRRA-utility functions.
topic	expected utility operator possibilistic saving models precautionary saving
url	https://www.mdpi.com/2075-1680/9/1/17
work_keys_str_mv	AT irinageorgescu optimalsavingbyexpectedutilityoperators AT janikinnunen optimalsavingbyexpectedutilityoperators
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Optimal Saving by Expected Utility Operators

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