Comparison of random cash flows
Résumé
In this paper we provide stochastic-dominance conditions for random cumulated cash flows, when various criteria of choice are assumed. Three (progressively finer) criteria are considered. The first one assumes only the expected utility principle. The second one involves discounting and preference scaling. The third one involves discounting and preference scaling, too, but in reverse order. Our results are finally compared with other known results for the case of nonrandom cash flows.