First Degree Stochastic Dominance Violations
Decision Weights and Bounded Rationality
Bibliographic Data
| ID | 9709024 |
|---|---|
| Authors | Haim Levy (0000-0001-8623-3507, Hebrew University of Jerusalem and the Academic Center of Law and Business, corresponding author) |
| Year | 2008 |
| Volume | 118 |
| Issue | 528 |
| Pages | 759-774 |
| Publication date | 2008-04-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2008.02141.x |
| OpenAlex | W2087213796 |
| Language | EN |
| Citations received | 3 |
| References cited | 25 |
Expected Utility Theory, Rank Dependent Expected Utility and Cumulative Prospect Theory imply no First Degree Stochastic Dominance (FSD) violations. Prospect Theory and Configural Weight models either allow for FSD violation or even predict this phenomenon. I find experimentally that FSD violations are not significant, and hence conclude that they are due to bounded rationality rather than to a systematic and predictable effect. Moreover, the more transparent the FSD, the less violations are observed, which supports the bounded rationality hypothesis. Therefore, based on the FSD violations observed in my experiments, the above three paradigms cannot be rejected. Copyright © 2008 The Author(s)
Biology · Bounded function · Bounded rationality · Degree (music · Dominance (genetics · Econometrics · Economics · Epistemology · Mathematical analysis · Mathematical economics · Microeconomics · Physics · Rationality · Stochastic dominance · Decision-Making and Behavioral Economics · Economic theories and models · Mathematics · Philosophy · Risk and Portfolio Optimization
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| Unique citing works | 3 |
|---|---|
| Citations per year | 0,23 |
| Citation span | 2013 - 2024 (12) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 3 |