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The applications of techniques from statistical (and classical) mechanics tomodel interesting problems in economics and finance has produced valuableresults. The principal movement which has steered this research direction isknown under the name of `econophysics'. In this paper, we illustrate andadvance some of the findings that have been obtained by applying themathematical formalism of quantum mechanics to model human decision makingunder `uncertainty' in behavioral economics and finance. Starting fromEllsberg's seminal article, decision making situations have been experimentallyverified where the application of Kolmogorovian probability in the formulationof expected utility is problematic. Those probability measures which bynecessity must situate themselves in Hilbert space (such as `quantumprobability') enable a faithful representation of experimental data. We thusprovide an explanation for the effectiveness of the mathematical framework ofquantum mechanics in the modeling of human decision making. We want to beexplicit though that we are not claiming that decision making has microscopicquantum mechanical features.

A Generalized Probability Framework to Model Economic Agents' Decisions Under Uncertainty