Experimental Estimation of the Preference Parameters in Almost Stochastic Dominance

Almost stochastic dominance (ASD) as proposed by Leshno and Levy (2002) has been widely applied in decision theory and in practice. It can help to identify the preferred distribution for the majority of decision makers when a small violation in stochastic dominance is involved. The purpose of this paper is to experimentally define the preference parameters in the set of most decision makers. By adopting almost Nth-degree risk defined by Tsetlin et al. (2015), the parameters for economically relevant risk-averse and prudent decision makers are estimated.