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

See all articles by Ali al-Nowaihi

Ali al-Nowaihi

University of Leicester - Department of Economics

Sanjit Dhami

University of Leicester

Date Written: July 11, 2016

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

Suggested Citation

al-Nowaihi, Ali and Dhami, Sanjit, The Ellsberg Paradox: A Challenge to Quantum Decision Theory? (July 11, 2016). Forthcoming, Journal of Mathematical Psychology, University of Leicester, Dept. of Economics Working Paper No. 16/08 , Available at SSRN: https://ssrn.com/abstract=2844472 or http://dx.doi.org/10.2139/ssrn.2844472

Ali Al-Nowaihi

University of Leicester - Department of Economics ( email )

Department of Economics
Leicester LE1 7RH, Leicestershire LE1 7RH
United Kingdom

Sanjit Dhami (Contact Author)

University of Leicester ( email )

Department of Economics
Leicester LE1 7RH, Leicestershire LE1 7RH
United Kingdom

HOME PAGE: http://www2.le.ac.uk/departments/economics/people/sdhami

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