Dynamic consistency of expected utility under non-classical (quantum) uncertainty

Abstract

Quantum cognition in decision-making is a recent and rapidely growing field. In this paper we develop an expected utility theory in a context of non-classical (quantum) uncertainty. We replace the classical state space with a Hilbert space which allows introducing the concept of quantum lottery. Within that framework we formulate axioms on preferences over quantum lotteries to establish a representation theorem. We show that demanding the consistency of choice behavior conditional on new information is equivalent to the von Neuman-Lüders postulate applied to beliefs. A dynamically consistent quantum-like agent may violate dynamic recursive consistency, however. This feature suggests interesting applications in behavioral economics as we illustrate in an example of persuasion.

full research paper