Type indeterminacy: A model of the KT(Kahneman-Tversky)-man

In this paper, we propose to use elements of the mathematical formalism of Quantum Mechanics to capture the idea that agents' preferences, in addition to being typically uncertain, can also be indeterminate. They are determined (i.e., realized, and not merely revealed) only when the action takes place. An agent is described by a state that is a superposition of potential types (or preferences or behaviors). This superposed state is projected (or "collapses") onto one of the possible behaviors at the time of the interaction. In addition to the main goal of modeling uncertainty of preferences that is not due to lack of information, this formalism seems to be adequate to describe widely observed phenomena of non-commutativity in patterns of behavior. We explore some implications of our approach in a comparison between classical and type indeterminate rational choice behavior. The potential of the approach is illustrated in two examples.