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Gauge field theory of market dynamics: Toward a solution of the "man vs. men" dilemma

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  • Yang, Yingrui

Abstract

The current economics and psychology are developed within the Newtonian tradition in physics from both conceptual and instrumental perspectives. This paper aims to integrate economics and cognitive science by applying gauge field theory of modern theoretical physics. Many controversies between normative theories and behavioral theories are characterized by the “man vs. men” dilemma. Gauge potential and gauge field strength is constructed at both the man-level and the men-level in order to satisfy the principle of gauge invariance. To maintain the Lagrangian density function invariant, the gauge transformations of the first kind and the second kind are performed at the man-level and the men-level, respectively. The market dynamics is modeled by the logic of electrodynamics. The interactions of the market and individual participants are formulated by the logic of electromagnetic coupling. In establishing the market dynamic equations, individual utility function serves as gauge function and efficiency provides gauge freedom.

Suggested Citation

  • Yang, Yingrui, 2015. "Gauge field theory of market dynamics: Toward a solution of the "man vs. men" dilemma," MPRA Paper 65015, University Library of Munich, Germany, revised 11 Jun 2015.
    • Handle: RePEc:pra:mprapa:65015
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    References listed on IDEAS

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    1. Wagner, Alfred, 1891. "Marshall's Principles of Economics," History of Economic Thought Articles, McMaster University Archive for the History of Economic Thought, vol. 5, pages 319-338.
    2. Daniel Kahneman, 2003. "Maps of Bounded Rationality: Psychology for Behavioral Economics," American Economic Review, American Economic Association, vol. 93(5), pages 1449-1475, December.
    3. Simon, Herbert A., 1984. "On the behavioral and rational foundations of economic dynamics," Journal of Economic Behavior & Organization, Elsevier, vol. 5(1), pages 35-55, March.
    4. Simon, Herbert A, 1979. "Rational Decision Making in Business Organizations," American Economic Review, American Economic Association, vol. 69(4), pages 493-513, September.
    5. Nicholas C. Barberis, 2013. "Thirty Years of Prospect Theory in Economics: A Review and Assessment," Journal of Economic Perspectives, American Economic Association, vol. 27(1), pages 173-196, Winter.
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    Cited by:

    1. Yang, Yingrui, 2021. "Ordinary rationality and Higgs mechanism," MPRA Paper 109912, University Library of Munich, Germany, revised 25 Sep 2021.
    2. Yang, Yingrui, 2017. "Sub-economic impulse and consciousness with quantum chromodynamic modeling," MPRA Paper 82921, University Library of Munich, Germany.

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    More about this item

    Keywords

    bounded rationality; economic rational man; electrodynamics; gauge theory; market dynamics; cognitive field;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics
    • A12 - General Economics and Teaching - - General Economics - - - Relation of Economics to Other Disciplines
    • C0 - Mathematical and Quantitative Methods - - General
    • C02 - Mathematical and Quantitative Methods - - General - - - Mathematical Economics
    • D0 - Microeconomics - - General
    • D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles

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