Probabilistic sophistication, second order stochastic dominance and uncertainty aversion

B-Tier
Journal: Journal of Mathematical Economics
Year: 2012
Volume: 48
Issue: 5
Pages: 271-283

Authors (4)

Score contribution per author:

0.503 = (α=2.01 / 4 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We study the interplay of probabilistic sophistication, second order stochastic dominance and uncertainty aversion, three fundamental notions in choice under uncertainty. In particular, our main result, Theorem 2, characterizes uncertainty averse preferences that are probabilistically sophisticated, as well as uncertainty averse preferences that satisfy second order stochastic dominance. As a byproduct, Proposition 2 highlights a fundamental tension between probabilistic sophistication/second order stochastic dominance and uncertainty aversion in the presence of nontrivial unambiguous events.

Technical Details

RePEc Handle
repec:eee:mateco:v:48:y:2012:i:5:p:271-283
Journal Field
Theory
Author Count
4
Added to Database
2026-01-25