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Quantum Bohmian model for financial market
Växjö University, Faculty of Mathematics/Science/Technology, School of Mathematics and Systems Engineering. Matematik. (Matematisk Modellering)
2006 (English)In: PHYSICA A: STATISTICAL MECHANICS AND ITS APPLICATIONS, ISSN 0378-4371, Vol. 374, no 1, p. 304-314Article in journal (Refereed) Published
Abstract [en]

We apply methods of quantum mechanics for mathematical modeling of price dynamics at the financial market. The Hamiltonian formalism on the price/price-change phase space describes the classical-like evolution of prices. This classical dynamics of prices is determined by “hard” conditions (natural resources, industrial production, services and so on). These conditions are mathematically described by the classical financial potential V(q), where q=(q1,…,qn) is the vector of prices of various shares. But the information exchange and market psychology play important (and sometimes determining) role in price dynamics. We propose to describe such behavioral financial factors by using the pilot wave (Bohmian) model of quantum mechanics. The theory of financial behavioral waves takes into account the market psychology. The real trajectories of prices are determined (through the financial analogue of the second Newton law) by two financial potentials: classical-like V(q) (“hard” market conditions) and quantum-like U(q) (behavioral market conditions).

Place, publisher, year, edition, pages
Elsevier, North-Holland , 2006. Vol. 374, no 1, p. 304-314
Keywords [en]
quantum mechanics, mathematical modeling, price dynamics, the financial market
National Category
Mathematics
Identifiers
URN: urn:nbn:se:vxu:diva-4300OAI: oai:DiVA.org:vxu-4300DiVA, id: diva2:204258
Available from: 2007-03-11 Created: 2007-03-11 Last updated: 2011-01-11Bibliographically approved

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CiteExportLink to record
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  • apa
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  • nn-NB
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  • Other locale
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  • asciidoc
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