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Quantum Decision Theory and the Ellsberg Paradox

journal contribution
posted on 2020-04-28, 14:08 authored by A al-Nowaihi, S Dhami, M Wei

We formulate a simple quantum decision model of the Ellsberg paradox. We report the results of an experiment we performed to test the matching probabilities predicted by this model using an incentive compatible method. We find that the theoretical predictions of the model are in conformity with our experimental results. We compare the predictions of our quantum model with those of probably the most successful non-quantum model of ambiguity, namely, the source dependent model. The predictions of our quantum model are not statistically significantly different from those of the source dependent model. The source dependent model requires the specification of probability weighting functions in order to fit the evidence. On the other hand, our quantum model makes no recourse to probability weighting functions. This suggests that much of what is normally attributed to probability weighting may actually be due to quantum probability.

History

Citation

CESifo Working Paper Series, 2018 (7158)

Author affiliation

/Organisation/COLLEGE OF SOCIAL SCIENCES, ARTS AND HUMANITIES/School of Business

Version

  • VoR (Version of Record)

Published in

CESifo Working Paper Series

Pagination

7158

Publisher

CESifo, Munich

issn

2364‐1428

Copyright date

2018

Available date

2018-07-14

Publisher version

https://www.cesifo.org/en/publikationen/2018/working-paper/quantum-decision-theory-and-ellsberg-paradox

Notes

Source info: CESifo Working Paper Series No. 7158

Language

en

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