A Behavioral Characterization of the Likelihood Ratio Order
11 Pages Posted: 19 Feb 2020 Last revised: 26 Jun 2020
Date Written: June 26, 2020
It is well-known that stochastic dominance is equivalent to a unanimity property for monotone expected utilities. For lotteries over a finite set of prizes, we establish an analogous relationship between likelihood-ratio dominance and monotone betweenness preferences, which are an important generalization of expected utility.
Keywords: betweenness preferences, expected utility, likelihood-ratio dominance, stochastic dominance
JEL Classification: D80, D81
Suggested Citation: Suggested Citation