On Quantum Ambiguity and Potential Exponential Computational Speed-Ups to Solving Dynamic Asset Pricing Models

Eric Ghysels and Jack Morgan

Papers from arXiv.org

Abstract: We formulate quantum computing solutions to a large class of dynamic nonlinear asset pricing models using algorithms, in theory exponentially more efficient than classical ones, which leverage the quantum properties of superposition and entanglement. The equilibrium asset pricing solution is a quantum state. We introduce quantum decision-theoretic foundations of ambiguity and model/parameter uncertainty to deal with model selection.

Date: 2024-05, Revised 2024-05
New Economics Papers: this item is included in nep-cmp
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