JQIS  Vol.5 No.1 , March 2015
Quantum Model of Decision-Making in Economics
Abstract: The paper designs a quantum model of decision-making (QMDM) that utilizes neuroscientific evidence. The new model provides both normative and positive implications to economics. First, it enhances the study of decision-making which is an extension of the expected utility theory (EUT) in mathematical economics. Second, we demonstrate how the quantum model mitigates drawbacks of the expected utility theory of today.
Cite this paper: Herzog, B. (2015) Quantum Model of Decision-Making in Economics. Journal of Quantum Information Science, 5, 1-5. doi: 10.4236/jqis.2015.51001.

[1]   Fehr, E. and Rangel, A. (2011) Neuroeconomic Foundations of Economic Choice—Recent Advances. The Journal of Economic Perspectives, 25, 3-30.

[2]   Rubinstein, A. (2013) Response Time and Decision Making: An Experimental Study. Judgement and Decision Making, 8, 540-551.

[3]   Krajbich, I., Oud, B. and Fehr, E. (2014) Benefits of Neuroeconomic Modeling: New Policy Interventions and Predictiors of Preference. American Economic Review, 104, 501-506.

[4]   Hotz, P., Eisenegger, C., Fehr, E., Baumgartner, T. and Knoch, D. (2011) Dorsolateral and Ventromedial Prefrontal Cortex Orchestrate Normative Choice. Nature Neuroscience, 14, 1468-1474.

[5]   von Neumann, J. and Morgenstern, O. (1953) Theory of Games and Economic Behavior. Princeton University Press, Princeton.

[6]   Gul, F. and Pesendorfer, W. (2005) The Revealed Preference Theory of Changing Tastes. Review of Economic Studies, 72, 429-448.

[7]   McFadden, D. (1973) Conditional Logit Analysis of Qualitative Choice Behavior. In: Zarembka, P., Ed., Frontiers in Econometrics, Academic Press, 105-142.

[8]   Green, J.R., Mas-Colell, A. and Whinston, M.D. (1995) Microeconomic Theory. Oxford Universtiy Press, Oxford.

[9]   Bernoulli, D. (1954) Exposition of a New Theory on the Measurement of Risk. Econometrica, 22, 23-36.

[10]   Allais, M. (1953) Le comportemnt de l’homme rationnel devant le risque: critique des postulats et axiomes de l’ecole americanine. Econometrica, 21, 503-546.

[11]   Ellsberg, D. (1961) Risk, Ambiguity, and the Savage Axioms. Quarterly Journal of Economics, 75, 643-669.

[12]   Kahneman, D. and Tversky, A. (1976) Prospect Theory: An Analysis of Decision under Risk. Econometrica, 47, 263-291.

[13]   Ariely, D. (2008) Predictably Irrational. Harper, New York.

[14]   Loomes, G. and Sugden, R. (1982) Regret Theory: An Alternative Theory of Rational Choice under Uncertainty. Economic Journal, 92, 805-824.

[15]   Chew, S., Epstein, L. and Segal, U. (1991) Mixture Symmetry and Quadratic Utility. Econometrica, 59, 139-163.

[16]   Kydland, F.E. and Prescott, E.C. (1977) Rules Rather Than Discretion: The Inconsistency of Optimal Plans. Journal of Political Economy, 85, 473-492.

[17]   Herzog, B. (2012) Neuroeconomics—The Economics of Human Brains. Volume 3/H of BEEC-Lecture Series. Euro-FH, Hamburg.

[18]   Yukalov, V.I. and Sornette, D. (2012) Quantum Decision Making by Social Agents.

[19]   Chabris, C.F., Morris, C.L., Taubinsky, D., Laibson, D. and Schuldt, J.P. (2009) The Allocation of Time in Decision-Making. Journal of the European Economic Association, 7, 628-637.

[20]   Planck, M. (1899) Ber Irreversible Strahlungsvorgnge. Volume 5 of Sitzungsberichte. Kniglich Preuische Akademie der Wissenschaften, Berlin.

[21]   Schneider, W. and Shiffrin, R.M. (1977) Controlled and Automatic Human Information Processing: I. Detection, Search, and Attention. Psychological Review, 84, 1-66.

[22]   von Neumann, J. (1955) Mathematical Founations of Qunatum Mechanics. Princeton University Press, Princeton.

[23]   Yukalov, V.I. and Sornette, D. (2010) Mathematical Structure of Quantum Decision Theory. Journal of Advanced Complex Systems, 13, 659-698.

[24]   Yukalov, V.I. and Sornette, D. (2011) Decision Theory with Prospect Interference and Entanglement. Theory and Decision, 70, 283-328.