IDEAS home Printed from https://ideas.repec.org/a/eee/phsmap/v392y2013i13p2924-2939.html
   My bibliography  Save this article

On the physical interpretation of statistical data from black-box systems

Author

Listed:
  • Eliazar, Iddo I.
  • Cohen, Morrel H.

Abstract

In this paper we explore the physical interpretation of statistical data collected from complex black-box systems. Given the output statistics of a black-box system, and considering a class of relevant Markov dynamics which are physically meaningful, we reverse-engineer the Markov dynamics to obtain an equilibrium distribution that coincides with the output statistics observed. This reverse-engineering scheme provides us with a conceptual physical interpretation of the black-box system investigated. Five specific reverse-engineering methodologies are developed, based on the following dynamics: Langevin, geometric Langevin, diffusion, growth-collapse, and decay-surge. In turn, these methodologies yield physical interpretations of the black-box system in terms of conceptual intrinsic forces, temperatures, and instabilities. The application of these methodologies is exemplified in the context of the distribution of wealth and income in human societies, which are outputs of the complex black-box system called “the economy”.

Suggested Citation

  • Eliazar, Iddo I. & Cohen, Morrel H., 2013. "On the physical interpretation of statistical data from black-box systems," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(13), pages 2924-2939.
  • Handle: RePEc:eee:phsmap:v:392:y:2013:i:13:p:2924-2939
    DOI: 10.1016/j.physa.2013.02.021
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378437113001842
    Download Restriction: Full text for ScienceDirect subscribers only. Journal offers the option of making the article available online on Science direct for a fee of $3,000

    File URL: https://libkey.io/10.1016/j.physa.2013.02.021?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Mantegna,Rosario N. & Stanley,H. Eugene, 2007. "Introduction to Econophysics," Cambridge Books, Cambridge University Press, number 9780521039871.
    2. Alfarano, Simone & Milakovic, Mishael, 2008. "Does classical competition explain the statistical features of firm growth?," Economics Letters, Elsevier, vol. 101(3), pages 272-274, December.
    3. Alfarano, Simone & Milaković, Mishael & Irle, Albrecht & Kauschke, Jonas, 2012. "A statistical equilibrium model of competitive firms," Journal of Economic Dynamics and Control, Elsevier, vol. 36(1), pages 136-149.
    4. Garibaldi,Ubaldo & Scalas,Enrico, 2010. "Finitary Probabilistic Methods in Econophysics," Cambridge Books, Cambridge University Press, number 9780521515597.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Luckstead, Jeff & Devadoss, Stephen, 2017. "Pareto tails and lognormal body of US cities size distribution," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 465(C), pages 573-578.
    2. Luckstead, Jeff & Devadoss, Stephen & Danforth, Diana, 2017. "The size distributions of all Indian cities," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 474(C), pages 237-249.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Cohen, Morrel H. & Eliazar, Iddo I., 2013. "Econophysical visualization of Adam Smith’s invisible hand," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(4), pages 813-823.
    2. Ellis Scharfenaker, 2022. "Statistical Equilibrium Methods In Analytical Political Economy," Journal of Economic Surveys, Wiley Blackwell, vol. 36(2), pages 276-309, April.
    3. Mundt, Philipp & Alfarano, Simone & Milaković, Mishael, 2020. "Exploiting ergodicity in forecasts of corporate profitability," Journal of Economic Dynamics and Control, Elsevier, vol. 111(C).
    4. Mundt, Philipp & Förster, Niels & Alfarano, Simone & Milaković, Mishael, 2014. "The real versus the financial economy: A global tale of stability versus volatility," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-26.
    5. Eliazar, Iddo, 2014. "From entropy-maximization to equality-maximization: Gauss, Laplace, Pareto, and Subbotin," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 415(C), pages 479-492.
    6. Scharfenaker, Ellis, 2020. "Implications of quantal response statistical equilibrium," Journal of Economic Dynamics and Control, Elsevier, vol. 119(C).
    7. David Vidal-Tomás & Simone Alfarano, 2020. "An agent-based early warning indicator for financial market instability," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 15(1), pages 49-87, January.
    8. Eliazar, Iddo, 2017. "Inequality spectra," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 469(C), pages 824-847.
    9. Einar Erlingsson & Simone Alfarano & Marco Raberto & Hlynur Stefánsson, 2013. "On the distributional properties of size, profit and growth of Icelandic firms," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 8(1), pages 57-74, April.
    10. Scharfenaker, Ellis & dos Santos, Paulo L., 2015. "The distribution and regulation of Tobin’s q," Economics Letters, Elsevier, vol. 137(C), pages 191-194.
    11. Halvarsson, Daniel, 2013. "Identifying High-Growth Firms," Ratio Working Papers 215, The Ratio Institute.
    12. David Vidal-Tomás & Alba Ruiz-Buforn & Omar Blanco-Arroyo & Simone Alfarano, 2022. "A Cross-Sectional Analysis of Growth and Profit Rate Distribution: The Spanish Case," Mathematics, MDPI, vol. 10(6), pages 1-20, March.
    13. Jangho Yang, 2018. "Information Theoretic Approaches In Economics," Journal of Economic Surveys, Wiley Blackwell, vol. 32(3), pages 940-960, July.
    14. Mundt, Philipp & Oh, Ilfan, 2019. "Asymmetric competition, risk, and return distribution," Economics Letters, Elsevier, vol. 179(C), pages 29-32.
    15. Oh, Ilfan, 2019. "Autonomy of profit rate distribution and its dynamics from firm size measures: A statistical equilibrium approach," BERG Working Paper Series 146, Bamberg University, Bamberg Economic Research Group.
    16. Philipp Mundt & Simone Alfarano & Mishael Milakovic, 2016. "Gibrat’s Law Redux: think profitability instead of growth," Industrial and Corporate Change, Oxford University Press, vol. 25(4), pages 549-571.
    17. Mundt, Philipp & Oh, Ilfan, 2019. "Asymmetric competition, risk, and return distribution," BERG Working Paper Series 145, Bamberg University, Bamberg Economic Research Group.
    18. Halvarsson, Daniel, 2019. "Asymmetric Double Pareto Distributions: Maximum Likelihood Estimation with Application to the Growth Rate Distribution of Firms," Ratio Working Papers 327, The Ratio Institute.
    19. Gregor Semieniuk & Ellis Scharfenaker, 2014. "A Bayesian Latent Variable Mixture Model for Filtering Firm Profit Rate," SCEPA working paper series. 2014-1, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
    20. Paulo L. dos Santos & Jangho Yang, 2019. "The persistent and informative distribution of returns on capital," Economics and Business Letters, Oviedo University Press, vol. 8(3), pages 156-165.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:phsmap:v:392:y:2013:i:13:p:2924-2939. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.