Related papers: Rational Bubbles: A Clarification
The rationalizability concept was introduced in \cite{Ber84} and \cite{Pea84} to assess what can be inferred by rational players in a non-cooperative game in the presence of common knowledge. However, this notion can be defined in a number…
In this study, we investigate asset price bubbles in a discrete-time, discrete-state market under model uncertainty and short sales prohibitions. Building on a new fundamental theorem of asset pricing and a superhedging duality in this…
Proponents of behavioral finance have identified several "puzzles" in the market that are inconsistent with rational finance theory. One such puzzle is the "excess volatility puzzle". Changes in equity prices are too large given changes in…
The interaction of multiple bubbles is a complex physical problem. A simplified case of multiple bubbles is studied theoretically with a bubble located at the center of a circular bubble cluster. All bubbles in the cluster are equally…
Economic and financial time series can feature locally explosive behavior when a bubble is formed. The economic or financial bubble, especially its dynamics, is an intriguing topic that has been attracting longstanding attention. To…
Game theoretic equilibria are mathematical expressions of rationality. Rational agents are used to model not only humans and their software representatives, but also organisms, populations, species and genes, interacting with each other and…
We present an interpretation of the physics of space-times undergoing eternal inflation by repeated nucleation of bubbles. In many cases the physics can be interpreted in terms of the quantum mechanics of a system with a finite number of…
In this paper the theory of semi-bounded rationality is proposed as an extension of the theory of bounded rationality. In particular, it is proposed that a decision making process involves two components and these are the correlation…
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…
The theory of rational choice assumes that when people make decisions they do so in order to maximize their utility. In order to achieve this goal they ought to use all the information available and consider all the choices available to…
The object of this contribution is to present the ideas behind the thinking of the French economist Pierre-Joseph Proudhon (1809-1865) in relation to the causes and effects of Stock market speculation. It is based upon the works of this…
I briefly review the physics of cosmic bubble collisions in false-vacuum eternal inflation. My purpose is to provide an introduction to the subject for readers unfamiliar with it, focussing on recent work related to the prospects for…
Renowned method of log-periodic power law(LPPL) is one of the few ways that a financial market crash could be predicted. Alongside with LPPL, this paper propose a novel method of stock market crash using white box model derived from simple…
Real-valued logics underlie an increasing number of neuro-symbolic approaches, though typically their logical inference capabilities are characterized only qualitatively. We provide foundations for establishing the correctness and power of…
This study presents empirical evidence to support the validity of new definitions in financial markets. The author develops a new method to determine investors' risk attitudes in financial markets. The risk attitudes of investors in US…
We argue that for the proof of Bell's theorem no assumptions about realism or free will are necessary. The key formula \[E(AB|a,b) = \int A(a,b,\lambda)B(a,b,\lambda)\rho(\lambda) d\lambda\] follows from the logic of plausible reasoning…
We summarize recent work on the consistent calculation of bubble-nucleation rates. Our approach is based on the notion of a real coarse-grained potential. The bubble-nucleation rate is calculated through an expansion around the…
The paper explores scaling properties of bubbles -- a complex analogue of Arnold tongues, associated to a one-dimensional family of analytic circle diffeomorphisms. Bubbles are smooth loops in the upper half-plane attached at all rational…
What does ``Big Bang" mean? What was the actual origin of these two words? There are many aspects hidden under this name, which are seldom explained. They are discussed here. To frame the analysis, help will be sought from the highly…
A dynamical model is introduced for the formation of a bullish or bearish trends driving an asset price in a given market. Initially, each agent decides to buy or sell according to its personal opinion, which results from the combination of…