Even (Mixed) Risk Lovers are Prudent: Comment

In: American economic review, Band 103, Heft 4, S. 1536-1537

Abstract

Crainich, Eeckhoudt, and Trannoy (2013) show that mixed risk lovers are prudent. I show that common risk loving utility functions may not exhibit mixed risk loving—as is typical for risk aversion and mixed risk aversion—and thus these traits should be carefully distinguished. In particular, risk lovers may be imprudent. (JEL D81)