Electronic copy available at: http://ssrn.com/abstract=1653911
Quantum Mechanics and Human Decision Making
Paras M. Agrawal* and Ramesh Sharda**
William S. Spears School of Business, Oklahoma State University, Institute for Research in
Information Systems, Stillwater, Oklahoma 74078, USA
In physics, at the beginning of the twentieth century it was recognized that some experiments could not be
explained by the conventional classical mechanics but the same could be explained by the newly discovered
It resulted into a new mechanics called quantum mechanics that revolutionized the scientific and
Again at the beginning of the twenty-first century, it is being recognized that some
experiments related with the human decision making processes could not be explained by the conventional
classical decision theory but the same could be explained by the models based on quantum mechanics.
It is now
recognized that we need quantum mechanics in psychology as well as in economics and finance.
In this paper we
attempt to advance and explain the present understanding of applicability of quantum mechanics to the human
decision making processes. Using the postulates analogous to the postulates of quantum mechanics, we show the
derivation of the quantum interference equation to illustrate the quantum approach. The explanation of disjunction
effect experiments of Tversky and Shafir(1992) has been chosen to demonstrate the necessity of a quantum
Further to suggest the possibility of application of the quantum theory to the business related decisions,
some terms such as price operator, state of mind of the acquiring firm, etc. are introduced and discussed in context
of the merger/acquisition of business firms. The possibility of the development in the areas such as quantum
finance, quantum management, application of quantum mechanics to the human dynamics related with health care
management, etc. is also indicated.
Quantum decision model, quantum interference, disjunction effect, human decision
making, quantum information processing, merger/acquisition of business firms, cognitive science, two-
stage gambling experiment, the sure-thing principle, Tversky-Shafir experiments.