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Quantum paradigm of probability amplitude and complex utility in entangled discrete choice modeling

Stan Lipovetsky

Journal of choice modelling, 2018, vol. 27, issue C, 62-73

Abstract: The main idea of this paper is motivated by a paradigm from quantum physics where the probability amplitude is built as a superposition of the wave functions of states, and the squared modulus of amplitude defines the probability of state membership. Similar linear aggregates are used in classical physics for description of wave interference effects. In contrast to regular techniques of probability estimation in social-economic research (such as logistic regression, multinomial-logit (MNL), discrete choice modeling (DCM), conjoint, best-worst scaling (BWS), and other methods), the proposed approach of probability amplitude modeling permits finding choice probabilities themselves and demonstrates possible interference phenomena of entanglement of different choices. Particularly, a BWS example evaluated by complex utility MNL demonstrates how a choice of each item is composed from its pure-state and mix-state probabilities. The obtained numerical results are supportive of theoretical considerations and practical applications of the probability amplitude modeling, and can serve for better understanding and evaluation of choice decisions.

Keywords: DCM; Quantum probability amplitude; MNL; Complex utility; Entangled choices; BWS probability structure (search for similar items in EconPapers)
Date: 2018
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