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A general framework is suggested to describe human decision making in a certain class of experiments performed in a trading laboratory. We are in particular interested in discerning between two different moods, or states of the investors,…
Asset price bubbles are situations where asset prices exceed the fundamental values defined by the present value of dividends. This paper presents a conceptually new perspective: the necessity of bubbles. We establish the Bubble Necessity…
Analyzing historical data of price indices we find an extraordinary growth phenomenon in several examples of hyper-inflation in which price changes are approximated nicely by double-exponential functions of time. In order to explain such…
In introductory physics laboratory instruction, students often expect to confirm or demonstrate textbook physics concepts (Wilcox & Lewandowski, 2017; Hu & Zwickl, 2017; Hu & Zwickl, 2018). This expectation is largely undesirable: labs that…
We calculate analytically the bubble nucleation rate in a model of first order inflation which is able to produce large scale structure. The computation includes the first-order departure from the thin-wall limit, the explicit derivation of…
The starting point of this paper is the so-called Robust Positive Expectation (RPE) Theorem, a result which appears in literature in the context of Simultaneous Long-Short stock trading. This theorem states that using a combination of two…
Consider a model of $N$ independent, increasing $\mathbb{N}_0$-valued processes, with random, independent waiting times between jumps. It is known that there is either an emergent `leader', in which a single process possesses the maximal…
We present a self-consistent model for explosive financial bubbles, which combines a mean-reverting volatility process and a stochastic conditional return which reflects nonlinear positive feedbacks and continuous updates of the investors'…
We study how experience with asset price bubbles changes the trading strategies of reinforcement learning (RL) traders and ask whether the change in trading strategies helps to prevent future bubbles. We train the RL traders in a…
We show that particle production during the expansion of bubbles of true vacuum in the sea of false vacuum is possible and calculate the resulting rate. As a result the nucleated bubbles cannot expand due to the transfer of false vacuum…
We introduce the concept of "negative bubbles" as the mirror image of standard financial bubbles, in which positive feedback mechanisms may lead to transient accelerating price falls. To model these negative bubbles, we adapt the…
We define a financial bubble as a period of unsustainable growth, when the price of an asset increases ever more quickly, in a series of accelerating phases of corrections and rebounds. More technically, during a bubble phase, the price…
We propose a novel model, the Hyped Log-Periodic Power Law Model (HLPPL), to the problem of quantifying and detecting financial bubbles, an ever-fascinating one for academics and practitioners alike. Bubble labels are generated using a…
Eternal inflation is a seemingly generic consequence of theories that give rise to accelerated expansion of the universe and possess multiple vacuum states. Making predictions in an eternally inflating universe is notoriously difficult…
We endorse the idea, suggested in recent literature, that BitCoin prices are influenced by sentiment and confidence about the underlying technology; as a consequence, an excitement about the BitCoin system may propagate to BitCoin prices…
It is already understood that the increasing observational evidence for an open Universe can be reconciled with inflation if our horizon is contained inside one single huge bubble nucleated during the inflationary phase transition. In this…
An academic scientist's professional success depends on publishing. Publishing norms emphasize novel, positive results. As such, disciplinary incentives encourage design, analysis, and reporting decisions that elicit positive results and…
We use experiments to study the evolution of bubble clusters in a swarm of freely rising, deformable bubbles. A new machine learning-aided algorithm allows us to identify and track bubbles in clusters and measure the cluster lifetimes. The…
In this paper we explain the wild fluctuations of financial prices from the intrinsic amplifying feedback of speculative supply and demand. Formally, we show that an asset return follows a multiplicative random growth with exogenous input,…
Many biological, psychological and economic experiments have been designed where an organism or individual must choose between two options that have the same expected reward but differ in the variance of reward received. In this way,…