Stochastic Dominance in Regret Theory
The regret theory of choice under uncertainty is known to admit intransitivities in preference relations. In this paper, the stochastic dominance properties of the theory are examined. It is shown that the usual definition of first stochastic dominance is not satisfied by regret-theoretic preferences and that, in general, violations of first stochastic dominance are not merely permitted but required. An exact characterization of the stochastic dominance rule corresponding to regret-theoretic preferences is presented. This concept is weaker than the usual definition, but stronger than the notion of statewise dominance in which one prospect yields a preferred outcome with probability 1.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 57 (1990)
Issue (Month): 3 ()
|Contact details of provider:|| |