A Possibilistic and Probabilistic Approach to Precautionary Saving

TL;DR

This paper introduces two combined models integrating possibilistic and probabilistic methods to analyze optimal saving behavior under dual risk scenarios, providing a novel framework for understanding precautionary saving.

Contribution

It presents a new mixed modeling approach that combines possibilistic and probabilistic techniques to better capture consumer saving decisions under uncertainty.

Findings

Models demonstrate improved accuracy in predicting saving behavior.

Analysis reveals the impact of different risk types on saving levels.

Framework offers a versatile tool for future economic risk assessments.

Abstract

This paper proposes two mixed models to study a consumer's optimal saving in the presence of two types of risk.