Rice University Darren Homrighausen David Kahle July 29th, 2005

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Rice University Darren Homrighausen David Kahle July 29th, 2005 An Investigation into Statistical Tests for Stochastic Dominance with Applications to Economic Decision Theory Rice University Darren Homrighausen David Kahle July 29th, 2005

Overview Stochastic Dominance Applications Test for Stochastic Dominance Problems Simulations and Results Conclusion

Stochastic Dominance Definition (First Order) A distribution G stochastically dominates a distribution F (denoted G Â F ) to the first order iff G(t) < F(t) for all t. 1