This article presents a general framework that allows irrational decision making to be theoretically investigated and simulated. Rationality in human decision making under uncertainty is normatively prescribed by the axioms of probability theory in order to maximize utility. However, substantial literature from psychology and cognitive science shows that human decisions regularly deviate from these axioms. Bistable probabilities are proposed as a principled and straight forward means for modeling (ir)rational decision making, which occurs when a decision maker is in “two minds”. We show that bistable probabilities can be formalized by positive-operator-valued projections in quantum mechanics. We found that (1) irrational decision making necessarily involves a wider spectrum of causal relationships than rational decision making, (2) the accessible information turns out to be greater in irrational decision making when compared to rational decision making, and (3) irrational decision making is quantum-like because it violates the Bell–Wigner polytope.
Rational Decision-Making under Uncertainty: Observed Betting Patterns on a Biased Coin