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We consider the psychological effect of preference reversal and show that it finds a natural explanation in the frame of quantum decision theory. When people choose between lotteries with non-negative payoffs, they prefer a more certain lottery because of uncertainty aversion. But when people evaluate lottery prices, e.g. for selling to others the right to play them, they do this more rationally, being less subject to behavioral biases. This difference can be explained by the presence of the attraction factors entering the expression of quantum probabilities. Only the existence of attraction factors can explain why, considering two lotteries with close utility factors, a decision maker prefers one of them when choosing, but evaluates higher the other one when pricing. We derive a general quantitative criterion for the preference reversal to occur that relates the utilities of the two lotteries to the attraction factors under choosing versus pricing and test successfully its application on experiments by Tversky et al. We also show that the planning paradox can be treated as a kind of preference reversal.
Quantum Decision Theory, advanced earlier by the authors, and illustrated for lotteries with gains, is generalized to the games containing lotteries with gains as well as losses. The mathematical structure of the approach is based on the theory of qu
The influence of additional information on the decision making of agents, who are interacting members of a society, is analyzed within the mathematical framework based on the use of quantum probabilities. The introduction of social interactions, whic
An essential task of groups is to provide efficient solutions for the complex problems they face. Indeed, considerable efforts have been devoted to the question of collective decision-making related to problems involving a single dominant feature. He
The symmetry of quantum theory under time reversal has long been a subject of controversy because the transition probabilities given by Borns rule do not apply backward in time. Here, we resolve this problem within a rigorous operational probabilisti
We suggest a model of a multi-agent society of decision makers taking decisions being based on two criteria, one is the utility of the prospects and the other is the attractiveness of the considered prospects. The model is the generalization of quant