Finite quantum mechanical model for the stock market

Liviu-Adrian Cotfas

Papers from arXiv.org

Abstract: The price of a given stock is exactly known only at the time of sale when the stock is between the traders. If we know the price (owner) then we have no information on the owner (price). A more general description including cases when we have partial information on both price and ownership is obtained by using the quantum mechanics methods. The relation price-ownership is similar to the relation position-momentum. Our approach is based on the mathematical formalism used in the case of quantum systems with finite-dimensional Hilbert space. The linear operator corresponding to the ownership is obtained from the linear operator corresponding to the price by using the finite Fourier transform. In our idealized model, the Schrodinger type equation describing the time evolution of the stock price is solved numerically.

Date: 2012-08, Revised 2012-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://arxiv.org/pdf/1208.6146 Latest version (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:1208.6146

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().