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The Ellsberg paradox: A challenge to quantum decision theory?*

Ali al-Nowaihi () and Sanjit Dhami ()

No 16/08, Discussion Papers in Economics from Department of Economics, University of Leicester

Abstract: We set up a simple quantum decision model of the Ellsberg paradox. We find that the matching probabilities that our model predict are in good agreement with those empirically measured by Dimmock et al. (2015). Our derivation is parameter free. It only depends on quantum probability theory in conjunction with the heuristic of insufficient reason. We suggest that much of what is normally attributed to probability weighting might actually be due to quantum probability.

Keywords: Quantum probability; Ellsberg paradox; probability weighting; matching probabilities; projective expected utility; projective prospect theory (search for similar items in EconPapers)
JEL-codes: D03 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-upt
Date: 2016-04
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