Stochastic dominance representation of optimistic belief: Theory and applications

Yusuke Osaki; John Quiggin

doi:10.1016/j.econlet.2008.09.005

Stochastic dominance representation of optimistic belief: Theory and applications

Research output: Contribution to journal › Article › peer-review

Abstract

This note gives a stochastic dominance representation of more optimistic belief in rank dependent expected utility. Applying this observation, we can demonstrate the effect of more optimistic belief on economic decisions and equilibria under risk making comparative static analysis.

Original language	English
Pages (from-to)	275-278
Number of pages	4
Journal	Economics Letters
Volume	101
Issue number	3
DOIs	https://doi.org/10.1016/j.econlet.2008.09.005
Publication status	Published - 2008 Dec
Externally published	Yes

Keywords

Comparative statics
Optimistic belief
Rank dependent expected utility
Stochastic dominance

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/j.econlet.2008.09.005

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title = "Stochastic dominance representation of optimistic belief: Theory and applications",

abstract = "This note gives a stochastic dominance representation of more optimistic belief in rank dependent expected utility. Applying this observation, we can demonstrate the effect of more optimistic belief on economic decisions and equilibria under risk making comparative static analysis.",

keywords = "Comparative statics, Optimistic belief, Rank dependent expected utility, Stochastic dominance",

author = "Yusuke Osaki and John Quiggin",

year = "2008",

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KW - Optimistic belief

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KW - Stochastic dominance

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