We explore a satisficing approach (Simon, 1955) to measure risk preference, which suggests cognitive limitations to decision making. In an experiment, subjects invest in a portfolio that contains a risk-free bond and a risky asset which has high or low return states with equal probability. The...

This paper points out the importance of Stochastic Dominance (SD) efficient sets being convex. We reviewclassic convexity and efficient set characterization results on SD efficiency of a given portfolio relative to adiversified set of assets and generalize them in the following aspects. First,...