Risk Averse Decisions in Business Planning | Zendy

Dillinger Anne M. | Zendy; Stein William E. | Zendy; Mizzi Philip J. | Zendy

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Risk Averse Decisions in Business Planning

Author(s) -

Dillinger Anne M.,

Stein William E.,

Mizzi Philip J.

Publication year - 1992

Publication title -

decision sciences

Language(s) - English

Resource type - Journals

SCImago Journal Rank - 1.238

H-Index - 108

eISSN - 1540-5915

pISSN - 0011-7315

DOI - 10.1111/j.1540-5915.1992.tb00431.x

Subject(s) - stochastic dominance , decision maker , dominance (genetics) , order (exchange) , stochastic ordering , actuarial science , risk aversion (psychology) , microeconomics , economics , operations research , expected utility hypothesis , computer science , business , econometrics , mathematical economics , management science , mathematics , finance , statistics , biochemistry , chemistry , gene

Second‐order stochastic dominance is used to determine preferences among various investments for any risk‐averse decision maker. On the other hand, when faced with choosing between different insurance policies or disaster plans, a risk‐averse decision maker should use a type of stochastic dominance called variability ordering. In this situation, second‐order stochastic dominance has been used in previous research and is incorrect.

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