The comparative statics of cumulative distribution function changes for the class of risk averse agents

Abstract The primary question addressed is, When does a particular change in the cumulative distribution function (CDF) describing a random variable always cause all risk averse decision makers to adjust the choice variable in the same direction? A necessary and sufficient condition, involving both the decision model and the CDF change, is derived. This condition allows the researcher to determine the tradeoff between assumptions on the economic model, and the CDF changes, which are necessary and/or sufficient to yield determinate comparative static results. Several applications are included.

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