Intuition Behind the Definition of Prudence? I'm having trouble seeing why an agent is said to exhibit "prudence" when u'''($\cdot$) > 0. How does having a utility function with a strictly positive third derivative make an agent act "prudently"? Thanks in advance.
From the Wikipedia article:


  Economists describe a consumer as "prudent" if he or she saves more when faced with riskier future income. This additional saving is called precautionary saving.


For risk averse consumers with thrice differentiable utility  $u^{\prime\prime\prime}&gt;0$ is a necessary and sufficient condition for consumers to save more for tomorrow when they are really unsure what is going to happen in the future.