Related papers: WARNING: Physics Envy May Be Hazardous To Your Wea…
We discuss several models in order to shed light on the origin of power-law distributions and power-law correlations in financial time series. From an empirical point of view, the exponents describing the tails of the price increments…
Existence theory in economics is usually in real domains such as the findings of chaotic trajectories in models of economic growth, tatonnement, or overlapping generations models. Computational examples, however, sometimes converge rapidly…
The tremendous popular success of Chaos Theory shares some common points with the not less fortunate Relativity: they both rely on a misunderstanding. Indeed, ironically , the scientific meaning of these terms for mathematicians and…
We review an emerging body of work by physicists addressing questions of economic organization and function. We suggest that, beyond simply employing models familiar from physics to economic observables, remarkable regularities in economic…
The quest for understanding the complex phenomena of the world has led to the development of various fields of science, each with its own methods, models, and assumptions. However, sometimes these fields can intersect and inspire each…
Several examples are used to illustrate how we deal cavalierly with infinities and unphysical systems in physics. Upon examining these examples in the context of infinities from Cantor's theory of transfinite numbers, the only known…
Economy is demanding new models, able to understand and predict the evolution of markets. To this respect, Econophysics offers models of markets as complex systems, that try to comprehend macro-, system-wide states of the economy from the…
This article is a follow-up of a short essay that appeared in Nature 455, 1181 (2008) [arXiv:0810.5306]. It has become increasingly clear that the erratic dynamics of markets is mostly endogenous and not due to the rational processing of…
This paper debates the contribution of Econophysics to the economic or financial domains. Since the traditional approach performed by Economics or Finance has revealed to be insufficient in fully characterizing and explaining the…
Econophysics is a science in its infancy, born about ten years ago at this time of writing, at the crossing roads of physics, mathematics, computing and of course economics and finance. It also covers human sciences, because all economics…
How can econophysics contribute to economics? Since the relation between basic principles of physics and economics is not established, there is no reason why physical theories should be of any value for economic theory. While economic…
In the given work the first attempt to generalize quantum uncertainty relation on macro objects is made. Business company as one of economical process participants was chosen by the authors for this purpose. The analogies between quantum…
The contradiction between physical and economical sciences concerning the growth of the production/consumption mechanism is analyzed. It is then shown that if one wishes to keep the security level stable or to enhance it in a growing…
In Physics, we have laws that determine the time evolution of a given physical system, depending on its parameters and its initial conditions. When we have multi-stable systems, many attractors coexist so that their basins of attraction…
This paper develops a unified framework in which economic dynamics is treated as evolutionary process analogous to those studied in natural sciences, including physics. Using methods from gauge field theory and plasticity, we show that the…
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…
Mathematics and its relation to the physical universe have been the topic of speculation since the days of Pythagoras. Several different views of the nature of mathematics have been considered: Realism - mathematics exists and is…
Classical quantitative finance models such as the Geometric Brownian Motion or its later extensions such as local or stochastic volatility models do not make sense when seen from a physics-based perspective, as they are all equivalent to a…
Modern physics has demonstrated that matter behaves very differently as it approaches the speed of light. This paper explores the implications of modern physics to the operation and regulation of financial markets. Information cannot move…
In the last 175 years, the physical understanding of nature has seen a revolutionary change. Until about 1850, Newton's theory and the mechanical world view derived from it provided the dominant view of the physical world, later…