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the claim
Prudence in economics is defined by a positive third derivative of the utility function.
the verdict
COMMON KNOWLEDGE
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In economic theory, risk aversion is represented by a negative second derivative of the utility function, while prudence (often associated with precautionary saving) is defined by a positive third derivative.

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The analysis

The claim states a standard microeconomic definition regarding higher-order risk preferences established by Kimball (1990), where prudence corresponds to a positive third derivative of the utility function ($u''' > 0$). Because this is a standard textbook definition in economics, it is common knowledge by definition and does not require citation of specific retrieved empirical papers.

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first checked04 Aug 2026
judged → COMMON KNOWLEDGE · 9504 Aug 2026
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