First and Second Degree Transformations and Comparative Statics under Uncertainty
The purpose of this paper is to investigate the direction of change in the optimal value of the choice variable following a deterministic transformation of the underlying random variable. Here, the author considers transformations representing either first or second degree stochastically dominant shifts. Several theorems are presented giving conditions on the economic model and risk-taking characteristics of the decisionmaker that are sufficient to obtain unambiguous comparative statics results for arbitrary first degree stochastically dominant and second degree stochastically dominant transformations as well as for simple first degree stochastically dominant and second degree stochastically dominant transformations. Copyright 1992 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.
Volume (Year): 33 (1992)
Issue (Month): 1 (February)
|Contact details of provider:|| Postal: 160 McNeil Building, 3718 Locust Walk, Philadelphia, PA 19104-6297|
Phone: (215) 898-8487
Fax: (215) 573-2057
Web page: http://www.econ.upenn.edu/ier
More information through EDIRC
|Order Information:|| Web: http://www.blackwellpublishing.com/subs.asp?ref=0020-6598 Email: |
When requesting a correction, please mention this item's handle: RePEc:ier:iecrev:v:33:y:1992:i:1:p:33-44. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.