Stochastic dominance is a form of stochastic ordering. The term is used in decision theor and decision analysis to refer to situations where one gamble (a probability distributionover possible outcomes, also known as prospects) can be ranked as superior to another gamble. It is based on preferences regarding outcomes. A preference might be a simple ranking of outcomes from favorite to least favored, or it might also employ a value measure (i.e., a number associated with each outcome that allows comparison of multiples of one outcome with another, such as two instances of winning a dollar vs. one instance of winning two dollars.)
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