The working paper, “Almost Stochastic Dominance: Magnitude Constraints on Risk Aversion” by PERC Visiting Research Professor Liqun Liu and coauthor Jack Meyer has been accepted for publication in the journal Insurance: Mathematics and Economics.
Under the general research topic of risk preferences of decision makers, this paper advances an alternative approach to Almost Stochastic Dominance (ASD) in which the magnitude of absolute or relative risk aversion is constrained with both an upper bound and a lower bound. Using the results of Meyer (1977b), the paper provides cumulative distribution function characterizations of these forms of ASD.
Congratulations to Dr. Liu and Dr. Meyer!