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Mixtures of Mean-Preserving Contractions

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  • Joseph Whitmeyer
  • Mark Whitmeyer

Abstract

Given a purely atomic probability measure with support on n points, P, any mean-preserving contraction (mpc) of P, Q, with support on m > n points is a mixture of mpcs of P, each with support on most n points. We illustrate an application of this result in economics.

Suggested Citation

  • Joseph Whitmeyer & Mark Whitmeyer, 2019. "Mixtures of Mean-Preserving Contractions," Papers 1905.05157, arXiv.org, revised Sep 2020.
    • Handle: RePEc:arx:papers:1905.05157
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    References listed on IDEAS

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    1. Athey, Susan & Levin, Jonathan, 2018. "The value of information in monotone decision problems," Research in Economics, Elsevier, vol. 72(1), pages 101-116.
    2. Rothschild, Michael & Stiglitz, Joseph E., 1970. "Increasing risk: I. A definition," Journal of Economic Theory, Elsevier, vol. 2(3), pages 225-243, September.
    3. Matthew Gentzkow & Emir Kamenica, 2016. "A Rothschild-Stiglitz Approach to Bayesian Persuasion," American Economic Review, American Economic Association, vol. 106(5), pages 597-601, May.
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