From ambiguity aversion to a generalized expected utility. Modeling preferences in a quantum probabilistic framework

DOI10.1016/J.JMP.2016.02.007zbMATH Open1396.91169arXiv1510.09058OpenAlexW2963039785WikidataQ62607194 ScholiaQ62607194MaRDI QIDQ334470FDOQ334470

Authors: Diederik Aerts, Sandro Sozzo 

Publication date: 1 November 2016

Published in: Journal of Mathematical Psychology (Search for Journal in Brave)

Abstract: Ambiguity and ambiguity aversion have been widely studied in decision theory and economics both at a theoretical and an experimental level. After Ellsberg's seminal studies challenging subjective expected utility theory (SEUT), several (mainly normative) approaches have been put forward to reproduce ambiguity aversion and Ellsberg-type preferences. However, Machina and other authors have pointed out some fundamental difficulties of these generalizations of SEUT to cope with some variants of Ellsberg's thought experiments, which has recently been experimentally confirmed. Starting from our quantum modeling approach to human cognition, we develop here a general probabilistic framework to model human decisions under uncertainty. We show that our quantum theoretical model faithfully represents different sets of data collected on both the Ellsberg and the Machina paradox situations, and is flexible enough to describe different subjective attitudes with respect to ambiguity. Our approach opens the way toward a quantum-based generalization of expected utility theory (QEUT), where subjective probabilities depend on the state of the conceptual entity at play and its interaction with the decision-maker, while preferences between acts are determined by the maximization of this 'state-dependent expected utility'.

Full work available at URL: https://arxiv.org/abs/1510.09058

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zbMATH Keywords

quantum probabilityexpected utility theoryquantum modelingEllsberg and Machina paradoxes

Mathematics Subject Classification ID

Decision theory (91B06) Utility theory (91B16) Quantum state spaces, operational and probabilistic concepts (81P16)

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Cited In (16)

• Quantum structure in economics: the Ellsberg paradox
• A Quantum Probability Model for the Constructive Influence of Affective Evaluation
• The Ellsberg paradox: a challenge to quantum decision theory?
• Dynamic consistency of expected utility under non-classical (quantum) uncertainty
• Type indeterminacy: A model of the KT(Kahneman-Tversky)-man
• A proposal to extend expected utility in a quantum probabilistic framework
• Representing attitudes towards ambiguity in Hilbert space: foundations and applications
• Identifying quantum structures in the Ellsberg paradox
• A quantum-probabilistic paradigm: non-consequential reasoning and state dependence in investment choice
• Quantum-like model of subjective expected utility
• Testing ambiguity and Machina preferences within a quantum-theoretic framework for decision-making
• Modeling human decision-making: an overview of the Brussels quantum approach
• Quantum structures in human decision-making: towards quantum expected utility
• Explaining versus describing human decisions: Hilbert space structures in decision theory
• A quantum-like model of selection behavior
• Experiment-dependent priors in psychology and physics

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