On Quantum Probability Calculus for Modeling Economic Decisions

In view of the Nobel Memorial Prize in Economic Sciences awarded to Richard H. Thaler in 2017 for his work on behavioral economics, we address in this paper the fundamentals of uncertainty modeling of free will. Extensions of von Neumann’s expected utility theory in social choice, including various nonadditive probability approaches, and prospect theory seem getting closer to cognitive behavior, but still ignore an important factor in human decision-making, namely the so-called “order effect”. Thus, a better candidate for modeling quantitatively uncertainty, under which economic agents make their decisions, could be a probability calculus which is both nonadditive and noncommutative. Such a probability calculus already exists, and it is called “quantum probability”. The main goal of this paper is to elaborate on the rationale of using quantum stochastic calculus in decision-making for econometricians, in a conference such as this, who are not yet aware of this new trend of on going research in the literature.

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