Year-end Sale % OFF 
Abstract
We characterize a range of Stochastic Dominance relations by means of finite systems of convex inequalities. For 'SD optimality' of degree N = 1, 2, 3, 4 and 'SD efficiency' of degree N = 2, 3, 4, 5, we obtain exact systems that can be implemented using Linear Programming or Convex Quadratic Programming. For SD optimality of degree N>=5 and SD efficiency of degree N>=6, we obtain necessary conditions. Our analysis leads to higher accuracy than existing necessary and approximate conditions for higher-degree relations if the partition of the outcomes domain is coarse. In addition, we use separate model variables for the values of the derivatives of all relevant orders at all relevant outcome levels, which allows for preference restrictions beyond the standard sign restrictions. Our systems of inequalities can be interpreted in terms of piecewise polynomial utility functions with a number of pieces that increases with the number of outcomes (T) and the degree of SD (N).
Published Version
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
