Skip to main content Accessibility help
×
Home
Hostname: page-component-768dbb666b-l8xdn Total loading time: 0.404 Render date: 2023-02-07T14:54:42.428Z Has data issue: true Feature Flags: { "useRatesEcommerce": false } hasContentIssue true

What Is Really Quantum in Quantum Econophysics?

Published online by Cambridge University Press:  01 January 2022

Abstract

Econophysics is a branch of economics that applies concepts and methods from physics to the financial markets. This article focuses on the approaches to quantum finance developed by Kirill Ilinski and Belal E. Baaquie to deal with the uncertainty characterizing financial time series. Allegedly, their models rest on a formal analogy between quantum mechanics and finance. In order to evaluate them, we raise the question what is really quantum in quantum econophysics. We then argue that the supposed analogy breaks in an important manner, which is relevant to explain the empirical success of the proposed models.

Type
Research Article
Copyright
Copyright 2021 by the Philosophy of Science Association. All rights reserved.

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Baaquie, B. E. 2004. Quantum Finance: Path Integrals and Hamiltonians for Options and Interest Rates. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Baaquie, B. E. 2009. Interest Rates and Coupon Bonds in Quantum Finance. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Baaquie, B. E. 2018. Quantum Field Theory for Economics and Finance. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Bagarello, F. 2007. “Stock Markets and Quantum Dynamics: A Second Quantized Description.” Physica A 386:283302.CrossRefGoogle Scholar
Bartha, P. 2019. “Analogy and Analogical Reasoning.” In Stanford Encyclopedia of Philosophy, ed. Zalta, Edward N. Stanford, CA: Stanford University. .Google Scholar
Busemeyer, J. R., Wang, Z., and Townsend, J. T. 2006. “Quantum Dynamics of Human Decision Making.” Journal of Mathematical Psychology 50:220–41.CrossRefGoogle Scholar
Feynman, R. P. 1948. “Space-Time Approach to Non-relativistic Quantum Mechanics.” Reviews of Modern Physics 20:367–87.CrossRefGoogle Scholar
Feynman, R. P., and Hibbs, Albert R. 2010. Quantum Mechanics and Path Integrals. Mineola, NY: Dover.Google Scholar
Guevara, E. 2007. “Quantum Econophysics.” Unpublished manuscript, arXiv, Cornell University. .Google Scholar
Ilinski, K. 1997. “Physics of Finance.” Unpublished manuscript, arXiv, Cornell University. .Google Scholar
Ilinski, K. 2001. Physics of Finance: Gauge Modelling in Non-equilibrium Pricing. New York: Wiley.Google Scholar
Johansen, A., Ledoit, O., and Sornette, D. 2000. “Crashes as Critical Points.” International Journal of Theoretical and Applied Finance 3 (2): 219–55.CrossRefGoogle Scholar
Jovanovic, F., and Schinckus, C. 2017. Econophysics and Financial Economics: An Emerging Dialogue. Oxford: Oxford University Press.CrossRefGoogle Scholar
Juhn, J., Palacios, P., and Weatherall, J. O. 2018. “Market Crashes as Critical Phenomena? Explanation, Idealization, and Universality in Econophysics.” Synthese 195:4477–505.Google Scholar
Lux, T., and Heitger, F. 2001. “Micro-Simulations of Financial Markets and the Stylized Facts.” In Empirical Science of Financial Fluctuations: The Advent of Econophysics, ed. Takayasu, H., 123–34. Berlin: Springer.Google Scholar
Lux, T., and Marchesi, M. 1999. “Scaling and Criticality in a Stochastic Multi-Agent Model of a Financial Market.” Nature 397:498500.CrossRefGoogle Scholar
Lux, T., and Marchesi, M. 2000. “Volatility Clustering in Financial Markets: A Micro-Simulation of Interacting Agents.” International Journal of Theoretical and Applied Finance 3:675702.CrossRefGoogle Scholar
Mantegna, R. N., and Stanley, H. E. 1999. An Introduction to Econophysics. Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Maslov, M. 2002. “Econophysics and Quantum Statistics.” Mathematical Notes 72 (6): 811–18.CrossRefGoogle Scholar
Rickles, D. 2007. “Econophysics for Philosophers.” Studies in History and Philosophy of Modern Physics 38:948–78.CrossRefGoogle Scholar
Rickles, D. 2011. “Econophysics and the Complexity of Financial Markets.” In Handbook of the Philosophy of Science, Vol. 10, Philosophy of Complex Systems, ed. Collier, J. and Hooker, C. North Holland: Elsevier.Google Scholar
Paolinelli, G., and Arioli, G. 2018. “A Path Integral Based Model for Stocks and Orders Dynamics.” Physica A 510:387–99.Google Scholar
Schinckus, C. 2014. “A Call for a Quantum Econophysics.” In Quantum Interaction, ed. Atmanspacher, H., Haven, E., Kitto, K., and Raine, D. Dordrecht: Springer.Google Scholar
Schinckus, C. 2018. “Ising Model, Econophysics and Analogies.” Physica A 508:95103.CrossRefGoogle Scholar
Soros, G. 1987. The Alchemy of Finance: Reading the Mind of the Market. New York: Wiley.Google Scholar
Yukalov, V. I., and Sornette, D. 2008. “Quantum Decision Theory as Quantum Theory of Measurement.” Physics Letters A 372:6867–71.Google Scholar
1
Cited by

Save article to Kindle

To save this article to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

What Is Really Quantum in Quantum Econophysics?
Available formats
×

Save article to Dropbox

To save this article to your Dropbox account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you used this feature, you will be asked to authorise Cambridge Core to connect with your Dropbox account. Find out more about saving content to Dropbox.

What Is Really Quantum in Quantum Econophysics?
Available formats
×

Save article to Google Drive

To save this article to your Google Drive account, please select one or more formats and confirm that you agree to abide by our usage policies. If this is the first time you used this feature, you will be asked to authorise Cambridge Core to connect with your Google Drive account. Find out more about saving content to Google Drive.

What Is Really Quantum in Quantum Econophysics?
Available formats
×
×

Reply to: Submit a response

Please enter your response.

Your details

Please enter a valid email address.

Conflicting interests

Do you have any conflicting interests? *