Decision making of agents who are members of a society is analyzed from the point of view of quantum decision theory. This generalizes the approach, developed earlier by the authors for separate individuals, to decision making under the influence of social interactions. The generalized approach not only avoids paradoxes, typical of classical decision making based on utility theory, but also exp...

We define inequality aversion as a decision-maker disliking it when his opponents’ payoffs differ from his own, diminishing sensitivity as this effect increasing less-than-proportionately as the opponents’ payoffs move further from the decision-maker’s, and a preference for Robin Hood redistributions as a preference for taking money from a high-payoff opponent and giving it to a low-payoff oppo...

This study validates a survey-based measure of general risk attitude by an incentive compatible experiment among more than 900 participants in rural Thailand. The survey measure of self-assessed risk attitude provides a useful approximation of the experimentally derived risk attitude. This holds when we add various socio-demographic control variables to the survey-experiment-relation which are ...

In an exchange economy under uncertainty populated by multiple consumers, we how the heterogeneity in the individual consumers’ subjective beliefs affect the representative consumer’s utility function. We derive a formula that indicates that the more heterogeneous the individual consumers’ beliefs are, the higher probabilities the representative consumer’s belief attaches to extreme events that...

Salience, Risky Choices and Gender Risk theories typically assume individuals make risky choices using probability weights that differ from objective probabilities. Recent theories suggest that probability weights vary depending on which portion of a risky environment is made salient. Using experimental data we show that salience affects young men and women differently, even after controlling f...

We conduct a natural field experiment with over 200 customers at a grocery store to investigate dynamic inconsistency and the demand for commitment in food choice. Subjects are invited to allocate and re-allocate food items received as part of a grocery delivery program. We observe substantial dynamic inconsistency, as well as a demand for commitment among a non-negligible number of subjects. I...

Standard economic models assume that the weight given to information from different sources depends exclusively on its diagnosticity. In this paper we study whether the same piece of information is weighted more heavily simply because it arose from direct experience rather than from observation. We investigate this possibility by conducting repeated game experiments in which groups of players a...

This paper characterizes properties of chance attitudes (nonadditive measures). It does so for decision under uncertainty (unknown probabilities), where it assumes Choquet expected utility, and for decision under risk (known probabilities), where it assumes rank-dependent utility. It analyzes chance attitude independently from utility. All preference conditions concern simple violations of the ...

We exhibit three non-standard cases of preference reversal (PR) between choices and valuations of bets. The endowment effect arises as a surprising consequence of the WTA/WTP disparity when the probabilities of winning get close to certainty. We consider a new theory of choice under risk, cognitive consistency (CC) theory, which can predict both standard and non-standard cases of PR, the WTA/WT...

Theories of expectations-based reference-dependent preferences have provided a critical modeling innovation, incorporating a structured theory of the formation of reference points. An important prediction of thesemodels is a monotone response in behavior to changes in expectations. To test such models we conduct a real-effort experiment manipulating expectations and examining consequences on ef...