In this paper, we introduce a new model of selection behavior under risk that describes an essential cognitive process for comparing values of objects and making a selection decision. This model is constructed by the quantum-like approach that employs the state representation specific to quantum theory, which has the mathematical framework beyond the classical probability theory. We show that our quantum approach can clearly explain the famous examples of anomalies for the expected utility theory, the Ellsberg paradox, the Machina paradox and the disparity between WTA and WTP. Further, we point out that our model mathematically specifies the characteristics of the probability weighting function and the value function, which are basic concepts in the prospect theory. (C) 2016 Elsevier Inc. All rights reserved.
This paper is devoted to a justification of quantum-like models of the process of decision making based on the theory of open quantum systems, i.e. decision making is considered as decoherence. This process is modeled as interaction of a decision maker, Alice, with a mental (information) environment R, surrounding her. Such an interaction generates "dissipation of uncertainty" from Alice's belief-state rho(t) into R, and asymptotic stabilization of rho(t) to a steady belief-state. The latter is treated as the decision state. Mathematically the problem under study is about finding constraints on 72, guaranteeing such stabilization. We found a partial solution of this problem (in the form of sufficient conditions). We present the corresponding decision making analysis for one class of mental environments, the so-called "almost homogeneous environments", with the illustrative examples: (a) behavior of electorate interacting with the mass-media "reservoir"; (b) consumers' persuasion. We also comment on other classes of mental environments. (C) 2017 Elsevier Inc. All rights reserved.
This paper contributes to quantum-like modeling of decision making (DM) under uncertainty through application of Heisenberg's uncertainty principle (in the form of the Robertson inequality). In this paper we apply this instrument to quantify uncertainty in DM performed by quantum-like agents. As an example, we apply the Heisenberg uncertainty principle to the determination of mutual interrelation of uncertainties for "incompatible questions" used to be asked in political opinion pools. We also consider the problem of representation of decision problems, e.g., in the form of questions, by Hermitian operators, commuting and noncommuting, corresponding to compatible and incompatible questions respectively. Our construction unifies the two different situations (compatible versus incompatible mental observables), by means of a single Hilbert space and of a deformation parameter which can be tuned to describe these opposite cases. One of the main foundational consequences of this paper for cognitive psychology is formalization of the mutual uncertainty about incompatible questions with the aid of Heisenberg's uncertainty principle implying the mental state dependence of (in)compatibility of questions. (C) 2018 Elsevier Inc. All rights reserved.
Cromwell's rule (also known as the zero priors paradox) refers to the constraint of classical probability theory that if one assigns a prior probability of 0 or 1 to a hypothesis, then the posterior has to be 0 or 1 as well (this is a straightforward implication of how Bayes' rule works). Relatedly, hypotheses with a very low prior cannot be updated to have a very high posterior without a tremendous amount of new evidence to support them (or to make other possibilities highly improbable). Cromwell's rule appears at odds with our intuition of how humans update probabilities. In this work, we report two simple decision making experiments, which seem to be inconsistent with Cromwell's rule. Quantum probability theory, the rules for how to assign probabilities from the mathematical formalism of quantum mechanics, provides an alternative framework for probabilistic inference. An advantage of quantum probability theory is that it is not subject to Cromwell's rule and it can accommodate changes from zero or very small priors to significant posteriors. We outline a model of decision making, based on quantum theory, which can accommodate the changes from priors to posteriors, observed in our experiments. (C) 2016 Elsevier Inc. All rights reserved.
The paper starts with an introduction to the basic mathematical model of classical probability (CP), i.e. the Kolmogorov (1933) measure-theoretic model. Its two basic interpretations are discussed: statistical and subjective. We then present the probabilistic structure of quantum mechanics (QM) and discuss the problem of interpretation of a quantum state and the corresponding probability given by Born’s rule. Applications of quantum probability (QP) to modeling of cognition and decision making (DM) suffer from the same interpretational problems as QM. Here the situation is even more complicated than in physics. We analyze advantages and disadvantages of the use of subjective and statistical interpretations of QP. The subjective approach to QP was formalized in the framework of Quantum Bayesianism (QBism) as the result of efforts from C. Fuchs and his collaborators. The statistical approach to QP was presented in a variety of interpretations of QM, both in nonrealistic interpretations, e.g., the Copenhagen interpretation (with the latest version due to A. Plotnitsky), and in realistic interpretations (e.g., the recent Växjö interpretation). At present, we cannot make a definite choice in favor of any of the interpretations. Thus, quantum-like DM confronts the same interpretational problem as quantum physics does.
Arbitrage is a key concept in the theory of asset pricing and it plays a crucial role in financial decision making. The concept of the curvature of so-called 'fibre bundles' can be used to define arbitrage. The concept of 'action' can play an important role in the definition of arbitrage. In this paper, we connect the probabilities emerging from a (non) zero linear action with so-called risk neutral probabilities. The paper also shows how arbitrage/non arbitrage can be well defined within a quantum-like paradigm. We also discuss briefly the behavioural dimension of arbitrage. (C) 2016 Elsevier Inc. All rights reserved.
The celebrated Aumann theorem states that if two agents have common priors, and their posteriors for a given event E are common knowledge, then their posteriors must be equal; agents with the same priors cannot agree to disagree. The aim of this note is to show that in some contexts agents using a quantum probability scheme for decision making can agree to disagree even if they have the common priors, and their posteriors for a given event E are common knowledge. We also point to sufficient conditions guaranteeing impossibility to agree on disagree even for agents using quantum(-like) rules in the process of decision making. A quantum(-like) analog of the knowledge operator is introduced; its basic properties can be formulated similarly to the properties of the classical knowledge operator defined in the set-theoretical approach to representation of the states of the world and events (Boolean logics). However, this analogy is just formal, since quantum and classical knowledge operators are endowed with very different assignments of truth values. A quantum(-like) model of common knowledge naturally generalizing the classical set-theoretic model is presented. We illustrate our approach by a few examples; in particular, on attempting to escape the agreement on disagree for two agents performing two different political opinion polls. We restrict our modeling to the case of information representation of an agent given by a single quantum question-observable (of the projection type). A scheme of extending of our model of knowledge/common knowledge to the case of information representation of an agent based on a few question-observables is also presented and possible pitfalls are discussed. (C) 2014 Elsevier Inc. All rights reserved.