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From Citizendium, the Citizens' Compendium

For more information, see: Economics

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 and the physics of complexity.

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.

Contents 1 Overview 2 Earlier physics-economics interaction 3 External links 4 References 4.1 Notes 4.2 Bibliography

Overview

^{[1] [2]}

Earlier physics-economics interaction

External links

• Econophysics Forum
• Econophysics.org (no longer maintained)

References

Notes

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.
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.

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.

• 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. 

• Solomon, S. and Levy, M. (2003). "Pioneers on a new continent: on physics and economics". Quantitative Finance 3: C12–C15.

• 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. 

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