Stochastic dominance representation of optimistic belief: Theory and applications

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.

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Year of publication:	2008
Authors:	Osaki, Yusuke ; Quiggin, John
Published in:	Economics Letters. - Elsevier, ISSN 0165-1765. - Vol. 101.2008, 3, p. 275-278
Publisher:	Elsevier
Keywords:	Comparative statics Optimistic belief Rank dependent expected utility Stochastic dominance

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Type of publication:	Article
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005297172