A Quantum Cognition Analysis of the Ellsberg Paradox
نویسندگان
چکیده
The expected utility hypothesis is one of the foundations of classical approaches to economics and decision theory and Savage’s Sure-Thing Principle is a fundamental element of it. It has been put forward that real-life situations exist, illustrated by the Allais and Ellsberg paradoxes, in which the Sure-Thing Principle is violated, and where also the expected utility hypothesis does not hold. We have recently presented strong arguments for the presence of a double layer structure, a classical logical and a quantum conceptual, in human thought and that the quantum conceptual mode is responsible of the above violation. We consider in this paper the Ellsberg paradox, perform an experiment with real test subjects on the situation considered by Ellsberg, and use the collected data to elaborate a model for the conceptual landscape surrounding the decision situation of the paradox. We show that it is the conceptual landscape which gives rise to a violation of the Sure-Thing Principle and leads to the paradoxical situation discovered by Ellsberg.
منابع مشابه
Can quantum decision theory explain the Ellsberg paradox?
We report the results of an experiment we performed to test the matching probabilities for the Ellsberg paradox predicted by the quantum decision model of al-Nowaihi and Dhami (2016). We find that the theoretical predictions of that model are in conformity with our experimental results. This supports the thesis that violations of classical (Kolmogorov) probability theory may not be due to irrat...
متن کاملThe Ellsberg paradox: A challenge to quantum decision theory?*
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 attribut...
متن کاملTesting Ambiguity and Machina Preferences Within a Quantum-theoretic Framework for Decision-making
The Machina thought experiments pose to major non-expected utility models challenges that are similar to those posed by the Ellsberg thought experiments to subjective expected utility theory (SEUT). We test human choices in the ‘Ellsberg three-color example’, confirming typical ambiguity aversion patterns, and the ‘Machina 50/51 and reflection examples’, partially confirming the preferences hyp...
متن کاملAmbiguity aversion in a delay analogue of the Ellsberg Paradox
Decision makers are often ambiguity averse, preferring options with subjectively known probabilities to options with unknown probabilities. The Ellsberg paradox is the best-known example of this phenomenon. Ambiguity has generally been studied in the domain of risky choice, and many theories of ambiguity aversion deal with ambiguity only in this context. However, ambiguity aversion may occur in...
متن کاملModeling the Ellsberg Paradox by Argument Strength
We present a formal measure of argument strength, which combines the ideas that conclusions of strong arguments are (i) highly probable and (ii) their uncertainty is relatively precise. Likewise, arguments are weak when their conclusion probability is low or when it is highly imprecise. We show how the proposed measure provides a new model of the Ellsberg paradox. Moreover, we further substanti...
متن کامل