The Ellsberg Paradox: A Challenge to Quantum Decision Theory?
Forthcoming, Journal of Mathematical Psychology
University of Leicester, Dept. of Economics Working Paper No. 16/08
34 Pages Posted: 28 Sep 2016
Date Written: July 11, 2016
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
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