Talk:Econophysics/Econophysics

This is a work-in-progress of a major rewrite of the current Econophysics article.

Econophysics and the closely-related field of sociophysics are areas of interdisciplinary research using methods and techniques from physics to model economic and other social phenomena respectively. Although examples can be found dating back some way into the literature, both fields came to prominence in the 1990s in response to a number of factors, including perceived crises in traditional economic methodology and analysis, the interest from the finance industry in employing trained physicists as quantitative analysts, and the complex patterns observed in the newly-available high-frequency financial data, which suggested links to various contemporary developments in statistical mechanics.

As well as bringing new mathematical and computational techniques to the table, econophysics represents a considerable conceptual shift in its approach to economic problems. Whereas traditional economics has tended to think in terms of steady states, emphasising concepts such as equilibrium, deductive rational behaviour and utility maximisation, econophysics emphasises the dynamical aspects of economic behaviour, focusing on non-equilibrium systems, bounded rationality and multi-agent modelling where the diverse participants have limited computational capacity.

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External links

Econophysics Forum
Econophysics.org (no longer maintained)

References

Notes

^ Stanley, H. E.; et al. (1996). "Anomalous fluctuations in the dynamics of complex systems: from DNA and physiology to econophysics". Physica A. 224: 302–321. doi:10.1016/0378-4371(95)00409-2. {{cite journal}}: Explicit use of et al. in: |author= (help)
^ Galam, S., Gefen, Y. and Shapir, Y. (1982). "Sociophysics: a new approach of sociological collective behaviour. I. Mean-behaviour description of a strike". Journal of Mathematical Sociology. 9: 1–13.{{cite journal}}: CS1 maint: multiple names: authors list (link)

Bibliography

Farmer, J. D. (1999). "Physicists attempt to scale the ivory towers of finance". Computing in Science and Engineering. 1 (6): 26–39. doi:10.1109/5992.906615.

Feigenbaum, J. (2003). "Financial physics". Reports on Progress in Physics. 66: 1611–1649. doi:10.1088/0034-4885/66/10/R02.

Gallegati, M., Keen, S., Lux, T. and Ormerod, P. (2006). "Worrying trends in econophysics". Physica A. 370: 1–6. doi:10.1016/j.physa.2006.04.029.{{cite journal}}: CS1 maint: multiple names: authors list (link)

McCauley, J. L. (2004). Dynamics of Markets: Econophysics and Finance. Cambridge: Cambridge University Press. ISBN 0521824478.

Mirowski, P. (1989). More Heat than Light: Economics as Social Physics, Physics as Nature's Economics. Cambridge: Cambridge University Press. ISBN 0521426898.

Osborne, M. F. M. (1977). The Stock Market and Finance from a Physicist's Viewpoint. Crossgar Press. ISBN 0964629208. {{cite book}}: Unknown parameter |address= ignored (|location= suggested) (help)

Solomon, S. and Levy, M. (2003). "Pioneers on a new continent: on physics and economics". Quantitative Finance. 3: C12–C15.{{cite journal}}: CS1 maint: multiple names: authors list (link)

Sornette, D. (2003). "Critical market crashes". Physics Reports. 378: 1–98. doi:10.1016/S0370-1573(02)00634-8.

Stanley, H. E. and Mantegna, R. N. (1999). An Introduction to Econophysics: Correlations and Complexity in Finance. Cambridge: Cambridge University Press. ISBN 0521620082.{{cite book}}: CS1 maint: multiple names: authors list (link)

Waldrop, M. M. (1992). Complexity: The Emerging Science at the Edge of Order and Chaos. New York: Simon & Schuster. ISBN 0671767895.

In my opinion, it is at first necessary to review the History part of the current article. The relationship between Economics and hard sciences, especially Physics, is not new at all. This is well explained in the book by Ingrao and Israel referenced in the present article. It will be necessary to point to the pages of Walras and Vilfredo Pareto and to point to or, at least as stubs, include some articles on Condorcet, Cournot and other French thinkers/mathematicians who inspired both Walras and Pareto. Maybe some revision of those pages will be necessary as well. Jumping from the end of the XIXth Century to 1994, when H. Eugene Stanley coined the term Econophysics is perhaps too much. However, in between, there has been a real separation of Economics from Physics and other hard sciences. For this reason, ideas from statistical physics developed by James Clerk Maxwell and Boltzmann never really entered the Economics mainstream. It might be useful to quote Jan Tinbergen's thesis on equilibrium in Physics and Economics. Tinbergen was a student of Paul Ehrenfest and as such, he was exposed to the theories of statistical equilibrium, but they are not mentioned in his thesis. Escalas 11:22, 13 February 2007 (UTC)[reply]

[1] Stanley, H. E.; et al. (1996). "Anomalous fluctuations in the dynamics of complex systems: from DNA and physiology to econophysics". Physica A. 224: 302–321. doi:10.1016/0378-4371(95)00409-2. {{cite journal}}: Explicit use of et al. in: |author= (help)

[2] Galam, S., Gefen, Y. and Shapir, Y. (1982). "Sociophysics: a new approach of sociological collective behaviour. I. Mean-behaviour description of a strike". Journal of Mathematical Sociology. 9: 1–13.{{cite journal}}: CS1 maint: multiple names: authors list (link)

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