Quantum Risk Preferences in a Laboratory Experiment

Abstract

   This paper presents a quantum model of risk preferences that seeks to provide an explanation of the experimental results reported in Berninghaus, Todorova & Vogt (2012). The finding that subjects choose the risk-dominant strategy in a 2× 2 coordination game, on the average, more often, when they have previously completed a risk questionnaire, is not anticipated by the standard economic theory. The model presented in this paper demonstrates that the coordination game and the risk questionnaire can be analyzed as two decisions situations that do not commute and predicts that the order in which decisions are made will influence behavioral choices.