Econometrica Vol. 92 No. 4 2024
Monotone Additive Statistics
Abstract
The expectation is an example of a descriptive statistic that is monotone with respect to stochastic dominance, and additive for sums of independent random variables. We provide a complete characterization of such statistics, and explore a number of applications to models of individual and group decision‐making. These include a representation of stationary monotone time preferences, extending the work of Fishburn and Rubinstein (1982) to time lotteries. This extension offers a new perspective on risk attitudes toward time, as well as on the aggregation of multiple discount factors. We also offer a novel class of non‐expected utility preferences over gambles which satisfy invariance to background risk as well as betweenness, but are versatile enough to capture mixed risk attitudes.
- DOI
- 10.3982/ecta19967
- Volume
- 92
- Issue
- 4
- Pages
- 995-1031
- Language
- en
- Sources
- bibtex:phds-export.bib crossref openalex