Thermodynamics 2.0 | 2022 Program: Sessions and Abstracts

Mon - Wed, July 18 - July 20 , 2022 , Boone, North Carolina

Session T02: Quantum Formalism in Decision making

13:00-14:00. Monday July 18, 2022

Chair: Emmanuel Haven

Title: Representing Decisions in Hilbert Space: Foundations and Applications

Presenter:

  • Sandro Sozzo

(University of Leicester)

Bio-sketch

Sandro Sozzo is associate professor at the School of Business of the University of Leicester (UK). His research interests mainly concern the development of quantum mathematical models in decision making under uncertainty, with applications in computer science, economics and finance. Sandro Sozzo is the secretary of the “International Quantum Structures Association” and the managing editor of the Springer Nature journal “Foundations of Science”. In 2014, Sandro Sozzo founded the “Centre for Quantum Social and Cognitive Science” (IQSCS), which he currently directs.

Author(s):

  • Sandro Sozzo

(University of Leicester)

images

Abstract:T02.124

Abstract

We elaborate a general mathematical framework to represent attitudes towards uncertainty that uses the mathematical formalism of quantum theory in Hilbert space. We show that the quantum-theoretic framework enables modelling of the Ellsberg paradox, which is problematical from the point of view of expected utility theory. We then apply the quantum-theoretic framework to concrete decision-making situations also involving financial and managerial decisions. More specifically, we work out a mathematical representation of various empirical studies which reveal that the attitudes of managers towards uncertainty shift from ambiguity seeking to ambiguity aversion, and vice versa, thus exhibiting both hope and fear effects.

The present framework provides a new promising direction towards the development of a unified quantum-based theory of human decision making, in which individuals take the decision that maximizes expected utility with respect to a quantum probability measure. Furthermore, the results presented here support a successful research programme that investigates quantum structures, as entanglement, emergence, and interference, outside the microscopic world of quantum physics.

Keywords: quantum structures, human decision-making, Ellsberg paradox, quantum uncertainty