 Quantum Decision Theory, Bounded Rationality and the Ellsberg ParadoxMengxing Wei, Ali al-Nowaihi and Sanjit Dhami Studies in Microeconomics, 2019, vol. 7, issue 1, 110-139 Abstract: Abstract We test a simple quantum decision model of the Ellsberg paradox. We find that the theoretical predictions of the model are in conformity with our experimental results. 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. When we replace quantum probability by Kolmogorov probability in our model, then the Ellsberg paradox reemerges. Hence, we make essential use of quantum probability theory. All our development uses no more than standard linear algebra and real numbers, which are very familiar to economists. This makes our paper accessible to a wider audience than the quantum community. JEL Classification: D01, D81, D91 Keywords: Quantum probability; Ellsberg paradox; source dependent model; projective expected utility; bounded rationality (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:miceco:v:7:y:2019:i:1:p:110-139 Access Statistics for this article More articles in Studies in Microeconomics |
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