A Quantum Model for the Ellsberg and Machina Paradoxes

  • Diederik Aerts
  • Sandro Sozzo
  • Jocelyn Tapia
Part of the Lecture Notes in Computer Science book series (LNCS, volume 7620)

Abstract

The Ellsberg and Machina paradoxes reveal that expected utility theory is problematical when real subjects take decisions under uncertainty. Suitable generalizations of expected utility exist which attempt to solve the Ellsberg paradox, but none of them provides a satisfactory solution of the Machina paradox. In this paper we elaborate a quantum model in Hilbert space describing the Ellsberg situation and also the Machina situation, and show that we can model the specific aspect of the Machina situation that is unable to be modeled within the existing generalizations of expected utility.

Keywords

Ellsberg paradox Machina paradox ambiguity aversion quantum modeling 

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Copyright information

© Springer-Verlag Berlin Heidelberg 2012

Authors and Affiliations

  • Diederik Aerts
    • 1
  • Sandro Sozzo
    • 1
  • Jocelyn Tapia
    • 2
  1. 1.Center Leo Apostel (CLEA)Vrije Universiteit Brussel (VUB)BrusselBelgium
  2. 2.Pontificia Universidad Católica de ChileSantiagoChile

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