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Mathematical analysis of Soros's theory of reflexivity

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  • C. P. Kwong

Abstract

The mathematical model proposed by George Soros for his theory of reflexivity is analyzed under the framework of discrete dynamical systems. We show the importance of the notion of fixed points for explaining the behavior of a reflexive system governed by its cognitive and manipulative functions. The interrelationship between these two functions induces fixed points with different characteristics, which in turn generate various system behaviors including the so-called "boom then bust" phenomenon in Soros's theory.

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  • C. P. Kwong, 2009. "Mathematical analysis of Soros's theory of reflexivity," Papers 0901.4447, arXiv.org.
    • Handle: RePEc:arx:papers:0901.4447
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    7. Rod Cross & Douglas Strachan, 1997. "On George Soros and Economic Analysis," Kyklos, Wiley Blackwell, vol. 50(4), pages 561-574, November.
    8. John F. O. Bilson, 1978. "The Monetary Approach to the Exchange Rate: Some Empirical Evidence (La théorie monétaire du taux de change: preuves empiriques) (El enfoque monetario del tipo de cambio: Algunas pruebas empíricas)," IMF Staff Papers, Palgrave Macmillan, vol. 25(1), pages 48-75, March.
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    Cited by:

    1. Palatella, Luigi, 2010. "A reflexive toy-model for financial market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(2), pages 315-322.

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