Related papers: A Natural Value Unit - Econophysics as Arbiter bet…
Defined by Lord Kelvin as the science of measurement it is described a fundamental fact of physics. The so called `natural' units represent the unique system of units conveniently used in the realm of High Energy Physics. The system of…
Planck units are natural physical scales of mass, length and time, built with the help of the fundamental constants $\hbar, c, G$. The functional role of the constants used for the construction of Planck units is different. If the first two…
A theoretical self-sustainable economic model is established based on the fundamental factors of production, consumption, reservation and reinvestment, where currency is set as a unconditional credit symbol serving as transaction equivalent…
Econophysics is a science in its infancy, born about ten years ago at this time of writing, at the crossing roads of physics, mathematics, computing and of course economics and finance. It also covers human sciences, because all economics…
We provide an overview of the fundamental units of physical quantities determined naturally by the values of fundamental constants of nature. We discuss a comparison between the 'Planck units', now widely used in theoretical physics and the…
Energy supply is mandatory for the production of economic value. Nevertheless, tradition dictates that an enigmatic 'invisible hand' governs economic valuation. Physical scientists have long proposed alternative but testable energy cost…
Many policy counterfactuals depend on how consumers value product attributes such as sugar, sodium, caffeine, alcohol, or emissions. Standard hedonic and differentiated-products models interpret these valuations statically. That…
The natural unit system, in which the value of fundamental constants such as c and h are set equal to one and all quantities are expressed in terms of a single unit, is usually introduced as a calculational convenience. However, we…
Observable quantities in cosmology are dimensionless, and therefore independent of the units in which they are measured. This is true of all physical quantities associated with the primordial perturbations that source cosmic microwave…
In general it is not clear which kind of information is supposed to be used for calculating the fair value of a contingent claim. Even if the information is specified, it is not guaranteed that the fair value is uniquely determined by the…
The statistical description and modeling of volatility plays a prominent role in econometrics, risk management and finance. GARCH and stochastic volatility models have been extensively studied and are routinely fitted to market data, albeit…
The theory of physical dimensions and units in physics is outlined. This includes a discussion of the universal applicability and superiority of quantity equations. The International System of Units (SI) is one example thereof. By analyzing…
The Walras approach to equilibrium focuses on the existence of market prices at which the total demands for goods are matched by the total supplies. Trading activities that might identify such prices by bringing agents together as potential…
A robust thermodynamic relation between inflation corrected monetary valuation and energy emerges from existing work. This is based on the energy used, the aggregate efficiency of all production processes ($\Lambda(t)$) in terms of Joules…
The renowned van der Waals (VDW) state equation quantifies the equilibrium relationship between pressure $P$, volume $V$ and temperature $k_{B}T$ of a real gas. We assign new variable interpretations adapted to the economic context: $P…
From positions, attained by modern theoretical physics in understanding of the universe bases, the methodological and philosophical analysis of fundamental physical concepts and their formal and informal connections with the real economic…
In this paper, we show that if every consumer in an economy has a quasi-linear utility function, then the normalized equilibrium price is unique, and is locally stable with respect to the t\^atonnement process. Our study can be seen as that…
How may we quantify the value of physical resources, such as entangled quantum states, heat baths or lasers? Existing resource theories give us partial answers; however, these rely on idealizations, like perfectly independent copies of…
The Price equation shows the unity between the fundamental expressions of change in biology, in information and entropy descriptions of populations, and in aspects of thermodynamics. The Price equation partitions the change in the average…
Walrasian prices, if they exist, have the property that one can assign every buyer some bundle in her demand set, such that the resulting assignment will maximize social welfare. Unfortunately, this assumes carefully breaking ties amongst…