The Potential of Econophysics for the Study of Economic Processes

Săvoiu, Gheorghe; Andronache, C.

doi:10.1016/b978-0-12-404626-9.00007-4

Cited by 7 publications

(4 citation statements)

References 92 publications

(39 reference statements)

Supporting

Mentioning

Contrasting

Order By: Relevance

“…It has always been considered as such by econophysicists, with new tools of statistical physics and recent breakthroughs in understanding chaotic systems [38]. Econophysics has alternative names, such as financial physics, arising initially from its new development of two different disciplines: finance and physics [39]. We have noticed that space pricing is prohibitive compared to ground transportation pricing.…”

Section: Econophysics Analogymentioning

confidence: 99%

Inferencing Space Travel Pricing from Mathematics of General Relativity Theory, Accounting Equation, and Economic Functions

Peng,

Xue,

et al. 2024

Mathematics

View full text Add to dashboard Cite

This study derives space travel pricing by Walrasian Equilibrium, which is logical reasoning from the general relativity theory (GRT), the accounting equation, and economic supply and demand functions. The Cobb–Douglas functions embed the endogenous space factor as new capital to form the space travel firm’s production function, which is also transformed into the consumer’s utility function. Thus, the market equilibrium occurs at the equivalence of supply and demand functions, like the GRT, which presents the equivalence between the spatial geometric tensor and the energy–momentum tensor, explaining the principles of gravity and the motion of space matter in the spacetime framework. The mathematical axiomatic set theory of the accounting equation explains the equity premium effect that causes a short-term accounting equation inequality, then reaches the equivalence by suppliers’ incremental equity through the closing accounts process of the accounting cycle. On the demand side, the consumption of space travel can be assumed as a value at risk (VaR) investment to attain the specific spacetime curvature in an expected orbit. Spacetime market equilibrium is then achieved to construct the space travel pricing model. The methodology of econophysics and the analogy method was applied to infer space travel pricing with the model of profit maximization, single-mindedness, and envy-free pricing in unit-demand markets. A case study with simulation was conducted for empirical verification of the mathematical models and algorithm. The results showed that space travel pricing remains associated with the principle of market equilibrium, but needs to be extended to the spacetime tensor of GRT.

show abstract

Section: Econophysics Analogymentioning

confidence: 99%

Inferencing Space Travel Pricing from Mathematics of General Relativity Theory, Accounting Equation, and Economic Functions

Peng,

Xue,

et al. 2024

Mathematics

View full text Add to dashboard Cite

show abstract

“…Econophysical models do not usually contain age variables, which means that they consider immortal agents, which last forever, just like atoms. Whereas in economics, it is obvious that changes of income and wealth are a function of multiple agents, which is taken into account in overlapping generations models [64]. Additionally, the charges put forward by Roehner, who claims that econophysicists examining financial markets omit the role of big players, such as big banks, international financial institutions, big corporations, big investment funds, influential media corporations or powerful government organizations, are also justified [65].…”

Section: Developmental Potential Of Econophysicsmentioning

confidence: 99%

Econophysics as a New School of Economic Thought: Twenty Years of Research

Jakimowicz

2016

Acta Phys. Pol. A

View full text Add to dashboard Cite

In 2015, the science known as econophysics, which has been developing very quickly in latest years, celebrated its 20th anniversary. Perhaps a 20-year period is too short to evaluate the importance and achievements of econophysics, but the broad scope of research and significance of certain results encouraged me to undertake such an attempt. If societies appreciate efforts by econophysicists, perhaps we will be able to avoid next economic crises and related losses. Econophysics is a transdisciplinary science based on the observation that physical objects and economic objects can share a common theory. Since logical homologies are its foundation, it is an example of the well-known isomorphism principle formulated by Ludwig von Bertalanffy. The emergence of interdisciplinary fields of knowledge is consistent with the paradigm of general systems theory. The development of a given field of knowledge is most often measured by its ability to formulate new knowledge about reality. Progress in research can be spoken of both when the application of traditional methods leads to the discovery of new facts and when new scientific laws are discovered using new methods. Econophysics is an attempt to develop economics through the transfer of research methods and techniques from physics to economics. We are therefore dealing here with a second possibility. The methods of physics most often applied in economics include the theory of stochastic processes, cellular automata and nonlinear dynamics. This study presents the most important existing achievements of econophysics and the attempts to reconcile them with traditional economic knowledge. The accomplishment of a paradigmatic correspondence between econophysics and economics, both in the local and in the global sense, is a prerequisite for using the achievements of the former in economic policy.

show abstract

“…Econophysics is a recent field that dates back to the 1990s; it applies theories\methods developed by physicists and associated with the physics of complex systems in order to study complex (nonlinear) problems in economics (Daniel & Sornette, 2010;Jovanovic & Schinckus, 2013;Săvoiu & Andronache, 2013). Because physics is a science dealing with a great number of natural issues (matter, energy, light etc.…”

Section: Introductionmentioning

confidence: 99%

Breaking down the Barriers between Econophysics and Financial Economics

Jovanovic¹,

Schınckus²

2018

SSRN Journal

View full text Add to dashboard Cite

This article highlights the current misunderstanding between economists and econophysicists by adopting the financial economists' viewpoint in order to explain why the works developed by econophysicists are not recognized in finance. Because both communities do not share the same scientific culture, and for the other reasons developed in the article, economists often consider econophysics as a strictly empirical field without theoretical justification. This paper shows the opposite; it also tries to facilitate the dialogue between econophysicists who often do not explain in details their theoretical roots and financial economists who are not familiar with statistical physics. Beyond this clarification, this paper also allows to identify what remains to be done for econophysicists to contribute significantly to financial economics: 1) development of a common framework\vocabulary in order to better compare and integrate the two approaches; 2) development of generative models explaining the emergence of power laws; and 3) development of statistical tests for the identification of such statistical regularities.

show abstract

The Potential of Econophysics for the Study of Economic Processes

Cited by 7 publications

References 92 publications

Inferencing Space Travel Pricing from Mathematics of General Relativity Theory, Accounting Equation, and Economic Functions

Inferencing Space Travel Pricing from Mathematics of General Relativity Theory, Accounting Equation, and Economic Functions

Econophysics as a New School of Economic Thought: Twenty Years of Research

Breaking down the Barriers between Econophysics and Financial Economics

Contact Info

Product

Resources

About