Quant Mechanics as a Source of Information Economics

Christian Aspalter

Hazbo Skoko

Emmanuel E. Haven

Emmanuel E. Haven

This paper tallies the links between fluid mechanics and quantum mechanics, and attempts to show whether those links can aid in beginning to build a formal template which is usable in economics models where time is (a)symmetric and memory is absent or present. An objective of this paper is to contemplate whether those formalisms can allow us to model information in economics in a novel way.

Raymond J. Hawkins, B. Roy Frieden

The authors show how the formal framework of quantum mechanics arises in economics generally and in financial economics in particular as a natural consequence of an information-theoretic approach to these fields. Specifically, extremizing Fisher information, subject to the constraint that the associated probability density reproduces observed economic phenomena, results in Schrödinger-like equations. The authors illustrate the utility of this approach with examples from financial economics. As an emergent consequence of information theory, the use of quantum formalism in economics can be seen as a powerful approach for understanding complex dynamics grounded in the probabilistic view of economics advocated by Knight and Keynes. These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

Raymond J. Hawkins, B. Roy Frieden

We show how a quantum formulation of financial economics can be derived from asymmetries with respect to Fisher information. Our approach leverages statistical derivations of quantum mechanics which provide a natural basis for interpreting quantum formulations of social sciences generally and of economics in particular. We illustrate the utility of this approach by deriving arbitrage-free derivative-security dynamics.