Denuit M.M.Huang R.J.Tzeng L.Y.Wang C.W.2019-07-222019-07-22201403784266https://scholars.lib.ntu.edu.tw/handle/123456789/414420Marginal Conditional Stochastic Dominance (MCSD) developed by Shalit and Yitzhaki (1994) gives the conditions under which all risk-averse individuals prefer to increase the share of one risky asset over another in a given portfolio. In this paper, we extend this concept to provide conditions under which most (and not all) risk-averse investors behave in this way. Instead of stochastic dominance rules, almost stochastic dominance is used to assess the superiority of one asset over another in a given portfolio. Switching from MCSD to Almost MCSD (AMCSD) helps to reconcile common practices in asset allocation and the decision rules supporting stochastic dominance relations. A financial application is further provided to demonstrate that using AMCSD can indeed improve investment efficiency. ? 2013 Elsevier B.V.Almost stochastic dominanceAsset allocationMarginal conditional stochastic dominanceOptimal investmentjournal article10.1016/j.jbankfin.2013.12.0142-s2.0-84893415568https://www.scopus.com/inward/record.uri?eid=2-s2.0-84893415568&doi=10.1016%2fj.jbankfin.2013.12.014&partnerID=40&md5=1f7e27bc0e2e0542a848b321d77ae452