TY - JOUR
T1 - Stochastic dominance in an ordinal world
AU - Spector, Yishay
AU - Leshno, Moshe
AU - Ben Horin, Moshe
PY - 1996/9/20
Y1 - 1996/9/20
N2 - Existing stochastic dominance rules apply to variables such as income, wealth and rates of return, all of which are measured on cardinal scales. This study develops and applies stochastic dominance rules for ordinal data. It is shown that the new rules are consistent with the traditional von Neumann-Morgenstern expected utility approach, and that they are applicable and relevant in a wide variety of managerial decision making situations, where existing stochastic dominance rules fail to apply. We apply ordinal SD rules to the transformation of random variables.
AB - Existing stochastic dominance rules apply to variables such as income, wealth and rates of return, all of which are measured on cardinal scales. This study develops and applies stochastic dominance rules for ordinal data. It is shown that the new rules are consistent with the traditional von Neumann-Morgenstern expected utility approach, and that they are applicable and relevant in a wide variety of managerial decision making situations, where existing stochastic dominance rules fail to apply. We apply ordinal SD rules to the transformation of random variables.
KW - Ordinal preference of outcomes
KW - Ordinal stochastic dominance
KW - Transformation of variables
UR - http://www.scopus.com/inward/record.url?scp=0030245999&partnerID=8YFLogxK
U2 - 10.1016/0377-2217(95)00118-2
DO - 10.1016/0377-2217(95)00118-2
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AN - SCOPUS:0030245999
SN - 0377-2217
VL - 93
SP - 620
EP - 627
JO - European Journal of Operational Research
JF - European Journal of Operational Research
IS - 3
ER -