On the "usual" misunderstandings between econophysics and finance: some clarifications on modelling approaches and efficient market hypothesis
Marcel Ausloos (),
Franck Jovanovic and
Papers from arXiv.org
In line with the recent research and debates about econophysics and financial economics, this article discusses on usual misunderstandings between the two disciplines in terms of modelling and basic hypotheses. In the literature devoted to econophysics, the methodology used by financial economists is frequently considered as a top-down approach (starting from a priori "first principles") while econophysicists rather present themselves as scholars working with a (empirical data prone) bottom-up approach. Although this dualist perspective is very common in the econophysics literature, this paper claims that the distinction is very confusing and does not permit to reveal the essence of the differences between finance and econophysics. The distinction between these two fields is mainly investigated here through the lens of the Efficient Market Hypothesis in order to show that, in substance, econophysics and financial economics tend to have a similar approach implying that the misunderstanding between these two fields at the modelling level can therefore be overstepped.
New Economics Papers: this item is included in nep-hpe
References: View references in EconPapers View complete reference list from CitEc
Citations View citations in EconPapers (2) Track citations by RSS feed
Downloads: (external link)
http://arxiv.org/pdf/1606.02045 Latest version (application/pdf)
Journal Article: On the “usual” misunderstandings between econophysics and finance: Some clarifications on modelling approaches and efficient market hypothesis (2016)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: http://EconPapers.repec.org/RePEc:arx:papers:1606.02045
Access Statistics for this paper
More papers in Papers from arXiv.org
Series data maintained by arXiv administrators ().