Economics, Econometrics and Finance
6 years ago

Stock market chaos predicted by new econophysics model.

Lecture notes in electrical engineering
A Simple Econophysics Model of the Stock Market as a Nonequilibrium Open System
Dmitriev Av, Vitaly Silchev, Victor Dmitriev

Paper Summary

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The article presents a simple model of the stock market based on the behavior of a laser system. The model shows that the stock market is always in a state of chaos and cannot reach a stable equilibrium. By analyzing the variation in ask and bid prices, as well as the number of active and passive agents, the model demonstrates that the stock market operates as a nonequilibrium open system. This approach helps to understand how external information influences the market dynamics and leads to deterministic chaos in stock trading.