Related papers: WARNING: Physics Envy May Be Hazardous To Your Wea…
Prediction problems in finance go beyond estimating the unknown parameters of a model (e.g. of expected returns). This is because such a model would have to include parameters governing the market participants' propensity to change their…
Mnay models situated in the current research landscape of modelling and simulating social processes have roots in physics. This is visible in the name of specialties as Econophysics or Sociophysics. This chapter describes the history of…
In classical physics, probabilistic or statistical knowledge has been always related to ignorance or inaccurate subjective knowledge about an actual state of affairs. This idea has been extended to quantum mechanics through a completely…
New status in quantum mechanics is connected with recent achievements in the inverse problem. With its help instead of about ten exactly solvable models which serve as a basis of the contemporary education there are infinite (!) number,…
This is a review about financial dependencies which merges efforts in econophysics and financial economics during the last few years. We focus on the most relevant contributions to the analysis of asset markets' dependencies, especially…
Fuzziness and randomicity widespread exist in natural science, engineering, technology and social science. The purpose of this paper is to present a new logic - uncertain propositional logic which can deal with both fuzziness by taking…
This article is a response to the recent Worrying Trends in Econophysics critique written by four respected theoretical economists. Two of the four have written books and papers that provide very useful critical analyses of the shortcomings…
The application of principles of Quantum Mechanics in areas outside of physics has been getting increasing attention in the scientific community in an emergent discipline called Quantum Cognition. These principles have been applied to…
Many economic theories have been introduced over the course of history to articulate our understanding of the economy. Classical theories by Adam Smith and David Ricardo's Comparative Advantage have been foundational for the last century's…
In this article we model chaotic dynamics in financial markets by treating the market price, and market makers' inventory, as anharmonic oscillators with a nonlinear coupling. The market makers' risk appetite being the key parameter that…
Covariational reasoning -- how one thinks about the way changes in one quantity affect another quantity -- is essential to calculus and physics instruction alike. As physics is often centered on understanding and predicting changes in…
We propose a stochastic map model of economic dynamics. In the last decade, an array of observations in economics has been investigated in the econophysics literature, a major example being the universal features of inequality in terms of…
Models necessarily capture only parts of a reality. Prediction models aim at capturing a future reality. In this paper we address the question of how the future is constructed (or: imagined) in an investment context where market…
More than hundred years ago the 'classic physics' was it in its full power, with just a few unexplained phenomena; which however led to a revolution and the development of the 'modern physics'. Today the computing is in a similar position:…
Our knowledge of quantum mechanics can satisfactorily describe simple, microscopic systems, but is yet to explain the macroscopic everyday phenomena we observe. Here we aim to shed some light on the quantum-to-classical transition as seen…
In economics, construction of perfect models in a way that would be comparable to the standards customary in physical sciences is generally not feasible. In particular, the observed value for an economic equilibrium may deviate…
Quantum uncertainty is described here in two guises: indeterminacy with its concomitant indeterminism of measurement outcomes, and fuzziness, or unsharpness. Both features were long seen as obstructions of experimental possibilities that…
Emergence is a pregnant property in various fields. It is the fact for a phenomenon to appear surprisingly and to be such that it seems at first sight that it is not possible to predict its apparition. That is the reason why it has often…
The problem of allocating scarce items to individuals is an important practical question in market design. An increasingly popular set of mechanisms for this task uses the concept of market equilibrium: individuals report their preferences,…
Scientific and technological progress has historically been very beneficial to humanity but this does not always need to be true. Going forward, science may enable bad actors to cause genetically engineered pandemics that are more frequent…