Related papers: Quantum Financial Economics - Risk and Returns
Threat modeling has emerged as a key process for understanding relevant threats within businesses. However, understanding the importance of threat events is rarely driven by the business incorporating the system. Furthermore, prioritization…
We propose a general interpretation for long-range correlation effects in the activity and volatility of financial markets. This interpretation is based on the fact that the choice between `active' and `inactive' strategies is subordinated…
We study risk-sharing economies where heterogenous agents trade subject to quadratic transaction costs. The corresponding equilibrium asset prices and trading strategies are characterised by a system of nonlinear, fully-coupled…
Repeated quantum game theory addresses long term relations among players who choose quantum strategies. In the conventional quantum game theory, single round quantum games or at most finitely repeated games have been widely studied, however…
Volatility of financial stock is referring to the degree of uncertainty or risk embedded within a stock's dynamics. Such risk has been received huge amounts of attention from diverse financial researchers. By following the concept of…
Extreme values and the tail behavior of probability distributions are essential for quantifying and mitigating risk in complex systems of all kinds. In multivariate settings, accounting for correlations is crucial. Although extreme value…
What is the dominating mechanism of the price dynamics in financial systems is of great interest to scientists. The problem whether and how volatilities affect the price movement draws much attention. Although many efforts have been made,…
Machine Learning models capable of handling the large datasets collected in the financial world can often become black boxes expensive to run. The quantum computing paradigm suggests new optimization techniques, that combined with classical…
Using a numerical simulation of the evolution of a qubit interacting with the environment we show that quantum error detection and correction can work effectively even when the recovery procedure introduces errors.
Effects of quantum and classical correlations on game theory are studied to clarify the new aspects brought into game theory by the quantum mechanical toolbox. In this study, we compare quantum correlation represented by a maximally…
The instability of the financial system as experienced in recent years and in previous periods is often linked to credit defaults, i.e., to the failure of obligors to make promised payments. Given the large number of credit contracts, this…
Quantum computing has recently appeared in the headlines of many scientific and popular publications. In the context of quantitative finance, we provide here an overview of its potential.
Analogies between the price dynamics in the foreign exchange market and 3-dimensional fully developed turbulence were recently presented in Nature vol. 381, 767-769 (1996). Independently, we have carried out a study comparing the parallel…
Classical game theory addresses decision problems in multi-agent environment where one rational agent's decision affects other agents' payoffs. Game theory has widespread application in economic, social and biological sciences. In recent…
Most people are risk-averse (risk-seeking) when they expect to gain (lose). Based on a generalization of ``expected utility theory'' which takes this into account, we introduce an automaton mimicking the dynamics of economic operations.…
The Internet plays a key role in society and is vital to economic development. Due to the pressure of competition, most technology companies, including Internet finance companies, continue to explore new markets and new business. Funding…
Quantum computers are expected to surpass the computational capabilities of classical computers and have a transformative impact on numerous industry sectors. We present a comprehensive summary of the state of the art of quantum computing…
In finance, sequential decision problems are often faced, for which reinforcement learning (RL) emerges as a promising tool for optimisation without the need of analytical tractability. However, the objective of classical RL is the expected…
This paper unifies the concepts of evolutionary games and quantum strategies. First, we state the formulation and properties of classical evolutionary strategies, with focus on the destinations of evolution in 2-player 2-strategy games. We…
The time-dependence of correlation functions under the influence of classical equations of motion is described by an exact evolution equation. For conservative systems thermodynamic equilibrium is a fixed point of these equations. We show…