posted 2009-10-22T17:38:02Z
la mura explores a variant on classic utility theory by recasting the assumptions in terms of a hilbert space, naturally using square-roots of probabilities. the recast assumptions seem just as well motivated as the original ones put forward in 1944, yet they don't suffer from the same set of well known behavioural paradoxes, such as those discovered by allais and ellsberg. i have always been skeptical of those who say human beings don't act rationally, are biased, etc.; rather, i would first look for faults with or alternatives to those theories of rationality themselves!