The 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 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: 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