What can econophysics contribute to financial economics?

Schınckus, Chrıstophe

doi:10.1007/s12232-011-0115-z

Cited by 15 publications

(13 citation statements)

References 65 publications

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“…Accordingly, one of the principal goals of this group of researchers has been to identify, measure, model and in some cases predict empirical regularities (ibid). Econophysics directs its attention to the interactions of the multiple components of the economic world that induce complex phenomena (Schinckus, 2010a). In this world, there is no guarantee that economic agents or individuals behave fully rationally, challenging thus the dominant neoclassical theory of rational choice.…”

Section: Econophysics and Orthodox Economic Theorymentioning

confidence: 99%

From Edgeworth to econophysics: a methodological perspective

Drakopoulos

Katselidis

2015

Journal of Economic Methodology

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Although most of the marginalist economists' methodology was influenced by 19th century classical physics, the work of second generation marginalist Francis Ysidro Edgeworth represents the highest point of classical physics influence to the development of mainstream economic methodology. Edgeworth's close parallelism between celestial and social mechanics expressed in his analogies between utility and energy and the principle of utility maximization to maximum energy, are important indications of the physics scientific ideal for economics. Subsequent leading theorists were not as explicit, although economic theory continued to be influenced by physics scientific ideal as the work of Pareto, Fisher and Samuelson indicates. However, the physics methodological framework has made a recent reappearance in the relatively new field of econophysics. Although there are methodological similarities, there are also important differences between mainstream economics and econophysics. Econophysicists' emphasis to statistical mechanics rather to mechanical models, their reservations towards rational agent theory and their rejection of many standard assumptions of mainstream economics, are examples of such differences. This might also explain the resistance of mainstream economic theorists to incorporate econophysics into economics. The paper examines the above from a methodological viewpoint. It also discusses the possible reasons for this historical development and its implications for economic methodology.

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Section: Econophysics and Orthodox Economic Theorymentioning

confidence: 99%

From Edgeworth to econophysics: a methodological perspective

Drakopoulos

Katselidis

2015

Journal of Economic Methodology

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“…Economics is a theory-based discipline founded on a micro-perspective that gives a central place to the notion of equilibrium (Mosini 2007). By constrast, econophysics is an empiricist and datadriven field founded on a macro-approach in which the notion of equilibrium does not necessarily play a key role (Schinckus 2010a(Schinckus , 2010c. 26 We have noted the fact that econophysics appears centered in European institutions while mainstream economics often is said to be dominant in American institutions (Maes and Buyst 2005).…”

Section: Conclusion: What Kind Of Future For Econophysics?mentioning

confidence: 99%

“… 2 For further information about the potential contributions of econophysics to economics, see Schinckus (2010a). …”

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confidence: 99%

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The Institutionalization of Econophysics in the Shadow of Physics

Gingras¹,

Schınckus²

2012

J Hist Econ Thought

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Econophysics presents itself as a new paradigm and a new specialty (or even a discipline) using various models and concepts imported from condensed matter and statistical physics to analyze economic and financial phenomena. Given that econophysics is based on different fundamental assumptions from those of mainstream economics, the disciplinary position of econophysics is not so clear. In this perspective, this paper will analyze the progressive institutionalization of econophysics using bibliometric methods to identify core authors as well as the structure of the disciplines with which econophysics is closely related.

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“…In this perspective, they developed stable Lévy processes. See Schinckus (2011) for further information.…”

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confidence: 99%