No abstract

Humans are notoriously bad at understanding probabilities, exhibiting a host of biases and distortions that are context dependent. This has serious consequences on how we assess risks and make decisions. Several theories have been developed to replace the normative rational expectation theory at the foundation of economics. These approaches essentially assume that (subjective) probabilities weight multiplicatively the utilities of the alternatives offered to the decision maker, although evidence suggest that probability weights and utilities are often not separable in the mind of the decision maker. In this context, we introduce a simple and efficient framework on how to describe the inherently probabilistic human decision-making process, based on a representation of the deliberation activity leading to a choice through stochastic processes, the simplest of which is a random walk. Our model leads naturally to the hypothesis that probabilities and utilities are entangled dual characteristics of the real human decision making process. It predicts the famous fourfold pattern of risk preferences. Through the analysis of choice probabilities, it is possible to identify two previously postulated features of prospect theory: the inverse S-shaped subjective probability as a function of the objective probability and risk-seeking behavior in the loss domain. It also predicts observed violations of stochastic dominance, while it does not when the dominance is “evident”. Extending the model to account for human finite deliberation time and the effect of time pressure on choice, it provides other sound predictions: inverse relation between choice probability and response time, preference reversal with time pressure, and an inverse double-S-shaped probability weighting function. Our theory, which offers many more predictions for future tests, has strong implications for psychology, economics and artificial intelligence.

We present a short review of discrete-time quantum walks (DTQW) as a potentially useful and rich formalism to model human decision-making. We present a pedagogical introduction of the underlying formalism and main structural properties. We suggest that DTQW are particularly suitable for combining the two strands of literature on evidence accumulator models and on the quantum formalism of cognition. Due to the additional spin degree of freedom, models based on DTQW allow for a natural modeling of model choice and confidence rating in separate bases. Levels of introspection and self-assessment during choice deliberations can be modeled by the introduction of a probability for measurement of either position and/or spin of the DTQW, where each measurement act leads to a partial decoherence (corresponding to a step towards rationalization) of the deliberation process. We show how quantum walks predict observed probabilistic misperception like S-shaped subjective probability and conjunction fallacy. Our framework emphasizes the close relationship between response times and type of preferences and of responses. In particular, decision theories based on DTQW do not need to invoke two systems (“fast” and “slow”) as in dual process theories. Within our DTQW framework, the two fast and slow systems are replaced by a single system, but with two types of self-assessment or introspection. The “thinking fast” regime is obtained with no or little self-assessment, while the “thinking slow” regime corresponds to a strong rate of self-assessment. We predict a trade-off between speed and accuracy, as empirically reported.

No abstract

Humans are notoriously bad at understanding probabilities, exhibiting a host of biases and distortions that are context dependent. This has serious consequences on how we assess risks and make decisions. Several theories have been developed to replace the normative rational expectation theory at the foundation of economics. These approaches essentially assume that (subjective) probabilities weight multiplicatively the utilities of the alternatives offered to the decision maker, although evidence suggest that probability weights and utilities are often not separable in the mind of the decision maker. In this context, we introduce a simple and efficient framework on how to describe the inherently probabilistic human decision-making process, based on a representation of the deliberation activity leading to a choice through stochastic processes, the simplest of which is a random walk. Our model leads naturally to the hypothesis that probabilities and utilities are entangled dual characteristics of the real human decision making process. It predicts the famous fourfold pattern of risk preferences. Through the analysis of choice probabilities, it is possible to identify two previously postulated features of prospect theory: the inverse S-shaped subjective probability as a function of the objective probability and risk-seeking behavior in the loss domain. It also predicts observed violations of stochastic dominance, while it does not when the dominance is "evident". Extending the model to account for human finite deliberation time and the effect of time pressure on choice, it provides other sound predictions: inverse relation between choice probability and response time, preference reversal with time pressure, and an inverse double-S-shaped probability weighting function. Our theory, which offers many more predictions for future tests, has strong implications for psychology, economics and artificial intelligence.