Type Indeterminacy: A Model of the KT(Kahneman-Tversky)-man

Ariane Lambert-Mogiliansky (), Shmuel Zamir () and Herve Zwirn ()

Discussion Paper Series from Center for Rationality and Interactive Decision Theory, Hebrew University, Jerusalem

Abstract: In this note we propose to use the mathematical formalism of Quantum Mechanics to capture the idea that agents’ preferences, in addition to being typically uncertain, can also be indeterminate. They are determined (realized, and not merely revealed) only when the action takes place. An agent is described by a state which is a superposition of potential types (or preferences or behaviors). This superposed state is projected (or ”collapses”) onto one of the possible behaviors at the time of the interaction. In addition to the main goal of modelling uncertainty of preferences which is not due to lack of information, this formalism, seems to be adequate to describe widely observed phenomena like framing and instances of noncommutativity in patterns of behavior. We propose two experiments to test the theory.

JEL-codes: D80 C65 B41 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cbe
Date: 2003-10
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