Finite quantum mechanical model for the stock market
AbstractThe 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.
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Bibliographic InfoPaper provided by arXiv.org in its series Papers with number 1208.6146.
Date of creation: Aug 2012
Date of revision: Sep 2012
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Web page: http://arxiv.org/
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-09-09 (All new papers)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Zhang, Chao & Huang, Lu, 2010. "A quantum model for the stock market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(24), pages 5769-5775.
- Chao Zhang & Lu Huang, 2010. "A quantum model for the stock market," Papers 1009.4843, arXiv.org, revised Oct 2010.
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