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Quantum Propensity in Economics
This paper describes an approach to economics that is inspired by quantum computing, and is motivated by the need to develop a consistent quantum mathematical framework for economics. The traditional neoclassical approach assumes that rational utility-optimisers drive market prices to a stable equilibrium, subject to external perturbations or market failures. While this approach has been highly influential, it has come under increasing criticism following the financial crisis of 2007/8. The quantum approach, in contrast, is inherently probabilistic and dynamic. Decision-makers are described, not by a utility function, but by a propensity function which specifies the probability of transacting. We show how a number of cognitive phenomena such as preference reversal and the disjunction effect can be modelled by using a simple quantum circuit to generate an appropriate propensity function. Conversely, a general propensity function can be quantized, via an entropic force, to incorporate effects such as interference and entanglement that characterise human decision-making. Applications to some common problems and topics in economics and finance, including the use of quantum artificial intelligence, are discussed.
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Publisher | Frontiers in Artificial Intelligence : Switzerland., 2022 |
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006
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English
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2624-8212
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NONE
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Other Information
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Scopus Q3
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