A quantum model for the stock market

Chao Zhang and Lu Huang

Physica A: Statistical Mechanics and its Applications, 2010, vol. 389, issue 24, 5769-5775

Abstract: Beginning with several basic hypotheses of quantum mechanics, we give a new quantum model in econophysics. In this model, we define wave functions and operators of the stock market to establish the Schrödinger equation for stock price. Based on this theoretical framework, an example of a driven infinite quantum well is considered, in which we use a cosine distribution to simulate the state of stock price in equilibrium. After adding an external field into the Hamiltonian to analytically calculate the wave function, the distribution and the average value of the rate of return are shown.

Keywords: Econophysics; Quantum finance; Stock market; Quantum model; Stock price; Rate of return (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:389:y:2010:i:24:p:5769-5775

DOI: 10.1016/j.physa.2010.09.008

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