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A probabilistic choice model based on Tsallis’ statistics

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  • Takahashi, Taiki

Abstract

Decision under risk and uncertainty (probabilistic choice) has been attracting attention in econophysics and neuroeconomics. This paper proposes a probabilistic choice model based on a mathematical equivalence of delay and uncertainty in decision-making, and the deformed algebra developed in the Tsallis’ non-extensive thermodynamics. Furthermore, it is shown that this model can be utilized to quantify the degree of consistency in probabilistic choice in humans and animals. Future directions in the application of the model to studies in econophysics, neurofinance, neuroeconomics, and social physics are discussed.

Suggested Citation

  • Takahashi, Taiki, 2007. "A probabilistic choice model based on Tsallis’ statistics," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 386(1), pages 335-338.
    • Handle: RePEc:eee:phsmap:v:386:y:2007:i:1:p:335-338
    DOI: 10.1016/j.physa.2007.07.005
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    References listed on IDEAS

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    1. Daniel Kahneman & Amos Tversky, 2013. "Prospect Theory: An Analysis of Decision Under Risk," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 6, pages 99-127, World Scientific Publishing Co. Pte. Ltd..
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    4. Takahashi, Taiki & Oono, Hidemi & Radford, Mark H.B., 2007. "Empirical estimation of consistency parameter in intertemporal choice based on Tsallis’ statistics," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 381(C), pages 338-342.
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    Citations

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    Cited by:

    1. Takahashi, Taiki, 2011. "Psychophysics of the probability weighting function," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(5), pages 902-905.
    2. West, B.J. & Grigolini, P., 2010. "A psychophysical model of decision making," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(17), pages 3580-3587.
    3. Destefano, Natália & Martinez, Alexandre Souto, 2011. "The additive property of the inconsistency degree in intertemporal decision making through the generalization of psychophysical laws," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(10), pages 1763-1772.
    4. Martinez, Alexandre Souto & González, Rodrigo Silva & Terçariol, César Augusto Sangaletti, 2008. "Continuous growth models in terms of generalized logarithm and exponential functions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(23), pages 5679-5687.
    5. dos Santos, Lindomar Soares & Destefano, Natália & Martinez, Alexandre Souto, 2018. "Decision making generalized by a cumulative probability weighting function," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 490(C), pages 250-259.
    6. Schinckus, Christophe, 2009. "Economic uncertainty and econophysics," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 388(20), pages 4415-4423.

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