Related papers: From Physics to Economics: An Econometric Example …

The universal bound on specific entropy was originally inferred from black hole thermodynamics. We here show from classical thermodynamics alone that for a system at fixed volume or fixed pressure, the ratio of entropy to nonrelativistic…

Simplified mechanistic models in ecology have been criticized for the fact that a good fit to data does not imply the mechanism is true: pattern does not equal process. In parallel, the maximum entropy principle (MaxEnt) has been applied in…

This paper is a review of a particular approach to the method of maximum entropy as a general framework for inference. The discussion emphasizes the pragmatic elements in the derivation. An epistemic notion of information is defined in…

It has been recently proposed that gravity might be an entropic force. Although a well defined fundamental description for such a mechanism is still lacking, it is still possible to address the viability of phenomenological models of…

We consider the thermodynamic approach to the description of economic systems and processes. The first and second laws of thermodynamics as applied to economic systems are derived and analyzed. It is shown that there is a deep analogy…

We develop the method of Maximum Entropy (ME) as a technique to generate approximations to probability distributions. The central results consist in (a) justifying the use of relative entropy as the uniquely natural criterion to select a…

The issue of discrete probability estimation for samples of small size is addressed in this study. The maximum likelihood method often suffers over-fitting when insufficient data is available. Although the Bayesian approach can avoid…

Physics and economics are two disciplines that share the common challenge of linking microscopic and macroscopic behaviors. However, while physics is based on collective dynamics, economics is based on individual choices. This conceptual…

In this tutorial we review the essential arguments behing entropic inference. We focus on the epistemological notion of information and its relation to the Bayesian beliefs of rational agents. The problem of updating from a prior to a…

This is a review article for Encyclopedia of Complexity and System Science, to be published by Springer http://refworks.springer.com/complexity/. The paper reviews statistical models for money, wealth, and income distributions developed in…

This study provides a summary of the theory which enables the analysis of extreme values, i.e., of measurements acquired from the observation of extraordinary/rare physical phenomena. The formalism is developed in a transparent way,…

The quantum ergotropy quantifies the maximal amount of work that can be extracted from a quantum state without changing its entropy. Given that the ergotropy can be expressed as the difference of quantum and classical relative entropies of…

In this paper we present an econophysic model for the description of shares transactions in a capital market. For introducing the fundamentals of this model we used an analogy between the electrical field produced by a system of charges and…

The entropic dynamics (ED) approach to quantum mechanics is ideally suited to address the problem of measurement because it is based on entropic and Bayesian methods of inference that have been designed to process information and data. The…

In this paper, we show how the MEP hypothesis may be used to build simple climate models without representing explicitly the energy transport by the atmosphere. The purpose is twofold. First, we assess the performance of the MEP hypothesis…

This work investigates a modified Schelling model within the scope and aims of Social Physics. The main purpose is to see if how the concepts of potential and kinetic energy can be represented within a computational sociological system. A…

Exponential families form the backbone of modern statistics and machine learning, but textbooks seldom derive them from first principles in an accessible way. Although minimal sufficiency and the principle of maximum entropy, originating in…

What is information? Is it physical? We argue that in a Bayesian theory the notion of information must be defined in terms of its effects on the beliefs of rational agents. Information is whatever constrains rational beliefs and therefore…

In line with the recent research and debates about econophysics and financial economics, this article discusses on usual misunderstandings between the two disciplines in terms of modelling and basic hypotheses. In the literature devoted to…

Maximum-entropy ensembles are key primitives in statistical mechanics from which thermodynamic properties can be derived. Over the decades, several approaches have been put forward in order to justify from minimal assumptions the use of…