In view of the 2017 Nobel Prize in Economics awarded to Robert Thaler for his work on Behaviorial Economics, we present a more appropriate "non-additive" probability approach to human decision-making affecting economic fluctuations, extending von Neumann's expected utility theory. It is a notion of non commutative (and hence non additive) probability borrowed from quantum physics which captures also the "order effect" in cognitive decisions.
The talk will be tutorial, without any knowledge from quantum mechanics! It focuses on showing that quantum probability is simply a natural generalization of Kolmogorov probability theory (from commutativity to non commutativity).
Among current interests in econometrics, we will single out the most promising one, namely using quantum probability as the correct framework for modeling uncertainty in human decision theory in the context of economics, especially, in financial econometrics.
Handouts will be available.