of the expected utility decision model context. The implications in an EU decision
model, however, provide an interpretation for FSD and support for the definition.
Theorem3.5:F(x) dominates G(x) in the first degree if and only if F(x) is preferred
or indifferent to G(x) by all EU decision makers with N-M utility functions satisfying
u
(x)≥ 0 for all x.
First degree stochastic dominance can be thought as the extension of the concept of
“larger” as it applies to real numbers. FSD is “larger” for random variables whose out-
comes are real numbers. Random variables can become larger in at least two distinct ...
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