Related papers: WARNING: Physics Envy May Be Hazardous To Your Wea…
Accuracy of economic theories and efficiency of economic policy strictly depend on the choice of the economic variables and processes mostly liable for description of economic reality. That states the general problem of assessment of any…
Supervised machine learning and predictive models have achieved an impressive standard today, enabling us to answer questions that were inconceivable a few years ago. Besides these successes, it becomes clear, that beyond pure prediction,…
The beliefs of physicists can bias their results towards their expectations in a number of ways. We survey a variety of historical cases of expectation bias in observations, experiments, and calculations.
By treating the financial market as a thermodynamic system, we establish a one-to-one correspondence between thermodynamic variables and economic quantities. Measured by the expected loss under the worst-case scenario, financial risk caused…
Quantum mechanics is a fundamentally probabilistic theory (at least so far as the empirical predictions are concerned). It follows that, if one wants to properly understand quantum mechanics, it is essential to clearly understand the…
Chaos and oscillations continue to capture the interest of both the scientific and public domains. Yet despite the importance of these qualitative features, most attempts at constructing mathematical models of such phenomena have taken an…
Many have wondered how mathematics, which appears to be the result of both human creativity and human discovery, can possibly exhibit the degree of success and seemingly-universal applicability to quantifying the physical world as…
A perplexing problem in understanding physical reality is why the universe seems comprehensible, and correspondingly why there should exist physical systems capable of comprehending it. In this essay I explore the possibility that rather…
We start with the idea that open quantum systems can be used to represent financial markets by modelling events from the external environment and their impact on the market price. We show how to characterize distinct orbits of the time…
Economic engineering is a new field wherein economic systems are modelled in the same manner as traditional mechanical and electrical engineering systems. In this paper, we use Newton's theory of motion as the basis for the theory of…
Entropy is a very useful concept from physics that tries to explain how a system behaves from a point of view of the thermodynamics. However, there are two ways to explain entropy, and it depends on if we are studying a microsystem or a…
This work deals with the new, relativistic direction in quantum econophysics, within the bounds of which a change of the classical paradigms in mathematical modelling of socio-economic system is offered. Classical physics proceeds from the…
In complex systems, many different parts interact in non-obvious ways. Traditional research focuses on a few or a single aspect of the problem so as to analyze it with the tools available. To get a better insight of phenomena that emerge…
We consider stability concepts for random matchings where agents have preferences over objects and objects have priorities for the agents. When matchings are deterministic, the standard stability concept also captures the fairness property…
Recent decades have seen a rise in the use of physics methods to study different societal phenomena. This development has been due to physicists venturing outside of their traditional domains of interest, but also due to scientists from…
The uncertainty associated with probing the quantum state is expressed as the effective abundance (measure) of possibilities for its collapse. New kinds of uncertainty limits entailed by quantum description of the physical system arise in…
Standard approaches to the theory of financial markets are based on equilibrium and efficiency. Here we develop an alternative based on concepts and methods developed by biologists, in which the wealth invested in a financial strategy is…
Physical concepts developed to describe instabilities in traffic flows can be generalized in a way that allows one to understand the well-known instability of supply chains (the so-called ``bullwhip effect''). That is, small variations in…
I argue that scientific determinism is not supported by facts, but results from the elegance of the mathematical language physicists use, in particular from the so-called real numbers and their infinite series of digits. Classical physics…
Classical physics is generally regarded as deterministic, as opposed to quantum mechanics that is considered the first theory to have introduced genuine indeterminism into physics. We challenge this view by arguing that the alleged…