The paper considers the choice between two finite income paths that are subject to random variations. It is shown that if one income path, X, has more cumulative variation at the outset and less variation toward the end than another income path, Y, then X dominates Y in the sense that (almost) every decision maker prefers X to Y. The intuitive reasoning is that a decision maker with income path X can, by engaging in a fair gamble, create the random variation of the cumulative income under Y and still have the advantage that more of the uncertainty is resolved at an earlier stage.

Benjamin Eden, Ariél Pakes; On Measuring the Variance-Age Profile of Lifetime Earnings, The Review of Economic Studies, Volume 48, Issue 3, 1 July 1981, Pa

Trade is sequential: Buyers arrive in batches, and each batch completes trade before the next arrives. Producers allocate the available supply among all potential batches of buyers. Inventories accumulate whenever a batch does not arrive. Shocks to cost and demand are serially independent. There is a stationary relationship between inventories and prices with the following properties. Larger beginning-of-period inventories tend to depress prices. Inventories are positively serially correlated. A unit increase in inventories reduces output by less than one unit. An increase in inventories leads to an increase in the price spread. Output tends to vary more than sales.

Trade is sequential: Buyers arrive in batches, and each batch completes trade before the next arrives. Producers allocate the available supply among all potential batches of buyers. Inventories accumulate whenever a batch does not arrive. Shocks to cost and demand are serially independent. There is a stationary relationship between inventories and prices with the following properties. Larger beginning-of-period inventories tend to depress prices. Inventories are positively serially correlated. A unit increase in inventories reduces output by less than one unit. An increase in inventories leads to an increase in the price spread. Output tends to vary more than sales.