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Can quantum decision theory explain the Ellsberg paradox?

Author

Listed:
  • Mengxing Wei
  • Ali al-Nowaihi
  • Sanjit Dhami

Abstract

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 irrational behaviour but, rather, due to inadequacy of classical probability theory for the description of human behaviour.

Suggested Citation

  • Mengxing Wei & Ali al-Nowaihi & Sanjit Dhami, 2017. "Can quantum decision theory explain the Ellsberg paradox?," Discussion Papers in Economics 17/07, Division of Economics, School of Business, University of Leicester.
    • Handle: RePEc:lec:leecon:17/07
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    File URL: https://www.le.ac.uk/economics/research/RePEc/lec/leecon/dp17-07.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Quantum probability; the Ellsberg paradox; the law of total probability; the law of reciprocity; the Feynman rules; cognitive limitations.;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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