Generalized Stochastic Dominance Theory (Group Decision Making, Income Distribution, and Risk Management)

Author: Tang Guoai
Publisher:
Publish Date: 2005-07-01
Features: The decision-making of humans under uncertainty is a fundamental theoretical issue in economics that has attracted extensive attention from scholars both domestically and internationally. Based on a systematic review, inheritance, and development of existing stochastic dominance theory, this book establishes a generalized stochastic dominance theory for group decision-making under uncertainty. This theory has broad application prospects in economic theoretical research and management practice. Applying this theory, the book constructs a generalized stochastic dominance framework for social welfare evaluation, organically unifying various existing economic welfare indicators. It also proposes a new indicator superior to the well-known Gini coefficient and Atkinson index—the generalized Atkinson index. Additionally, the book introduces the concept of a generalized stochastic dominance monotonic consistent risk measure and a risk measurement tool superior to the current international standard risk management tools VAR and Expected Shortfall (ES)—the higher-order expected loss risk measure. This book can serve as a reference for graduate students in economics and finance, economic theorists, researchers on income distribution, investors, and risk management professionals.