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

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 1
Externally published	Yes

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Keywords

Comparative statics
Optimistic belief
Rank dependent expected utility
Stochastic dominance

ASJC Scopus subject areas

Finance
Economics and Econometrics

Cite this

Osaki, Y., & Quiggin, J. (2008). Stochastic dominance representation of optimistic belief: Theory and applications. Economics Letters, 101(3), 275-278. https://doi.org/10.1016/j.econlet.2008.09.005

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Access to Document

10.1016/j.econlet.2008.09.005