A BEJTE Topics article.

Abstract

We establish mathematical equivalence between independence of irrelevant alternatives and monotonicity with respect to first order stochastic dominance. This formal equivalence result between the two principles is obtained under two key conditions. Firstly, for all natural numbers m, each principle is defined on the domain of compound lotteries with compoundness level m. Secondly, the standard concept of reduction of compound lotteries applies.

Submitted: December 14, 2007 · Accepted: April 3, 2008 · Published: April 19, 2008

Recommended Citation

Zimper, Alexander (2008) "Revisiting Independence and Stochastic Dominance for Compound Lotteries," The B.E. Journal of Theoretical Economics: Vol. 8 : Iss. 1 (Topics), Article 12.
Available at: http://www.bepress.com/bejte/vol8/iss1/art12