Stochastically dominating shifts and the competitive firm

The production responses of the competitive firm to stochastically dominating shifts in the distribution of output-price have been the object of much research. In a recent paper, Simpson and Sproule present five sets of sufficient conditions, any one of which may be used to jointly sign the production responses of the competitive firm to first-, second-, and third-order stochastically dominating shifts. This paper demonstrates that one of the conditions outlined in the above mentioned reference is unnecessarily restrictive in the case of the logarithmic and the positive-power utility functions.