Quantum decision theory augments rank-dependent expected utility and Cumulative Prospect Theory

Using experimental data on choices between pairs of lotteries, we compare a new parameterized Quantum Decision Theory (QDT) with Rank Dependent Utility Theory (RDU) and Cumulative Prospect Theory (CPT). At the aggregate level, CPT-based QDT outperforms. At the individual level, the considerable heterogeneity across subjects is best described by the RDU-based QDT, at odds with the conclusion using the representative agent approach. The quantum attraction factor thus plays a key role in describing subjects’ behaviors at both levels. A large fraction of subjects exhibit temporal stability of asset integration attitudes. Another significant fraction of subjects are diagnosed to be using mixtures of mental models, which are elicited selectively depending on the nature of the presented choice alternatives.