Type Indeterminacy: A Model of the KT(Kahneman-Tversky)-man
AbstractIn this note we propose to use the mathematical formalism of Quantum Mechanics to capture the idea that agents’ preferences, in addition to being typically uncertain, can also be indeterminate. They are determined (realized, and not merely revealed) only when the action takes place. An agent is described by a state which is a superposition of potential types (or preferences or behaviors). This superposed state is projected (or ”collapses”) onto one of the possible behaviors at the time of the interaction. In addition to the main goal of modelling uncertainty of preferences which is not due to lack of information, this formalism, seems to be adequate to describe widely observed phenomena like framing and instances of noncommutativity in patterns of behavior. We propose two experiments to test the theory.
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Bibliographic InfoPaper provided by The Center for the Study of Rationality, Hebrew University, Jerusalem in its series Discussion Paper Series with number dp343.
Length: 31 pages
Date of creation: Oct 2003
Date of revision:
Find related papers by JEL classification:
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- C65 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Miscellaneous Mathematical Tools
- B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
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