Pilot wave quantum model for the stock market

We use methods of classical and quantum mechanics for mathematical modeling of price dynamics at the financial market. The Hamiltonian formalism on the price/price-change phase space is used to describe the classical-like evolution of prices. This classical dynamics of prices is determined by ”hard” conditions (natural resources, industrial production, services and so on). These conditions as well as ”hard” relations between traders at the financial market are mathematically described by the classical financial potential. At the real financial market ”hard” conditions are not the only source of price changes. The information exchange and market psychology play important (and sometimes determining) role in price dynamics. We propose to describe this ”soft” financial factors by using the pilot wave (Bohmian) model of quantum mechanics. The theory of financial mental (or psychological) waves is used to take into account market psychology. The real trajectories of prices are determined (by the financial analogue of the second Newton law) by two financial potentials: classical-like (”hard” market conditions) and quantum-like (”soft” market conditions).

[1]  Basil J. Hiley,et al.  Non-commutative Geometry, the Bohm Interpretation and the Mind-Matter Relationship * . , 2001 .

[2]  George Soros,et al.  The Alchemy of Finance: Reading the Mind of the Market , 1987 .

[3]  Peter L. Knight,et al.  The Quantum Theory of Motion , 1994 .

[4]  P R Wallace SCIENCE IN THE MODERN WORLD — SOME OBSERVATIONS , 1991 .

[5]  Andrei Khrennikov,et al.  Ensemble fluctuations and the origin of quantum probabilistic rule , 2002 .

[6]  G. Soros The Alchemy of Finance , 1994 .

[7]  W. Heisenberg The Physical Principles of the Quantum Theory , 1930 .

[8]  A. Whitehead Adventures of ideas , 1933 .

[9]  R. Penrose,et al.  The Large, the Small and the Human Mind by Roger Penrose. Cambridge University Press, 1997, xviii + 185 pp. £14.95 , 1998, Philosophy.

[10]  R. Penrose,et al.  Shadows of the Mind , 1994 .

[11]  Daniel J. Amit,et al.  Modeling brain function: the world of attractor neural networks, 1st Edition , 1989 .

[12]  J. Scheinkman,et al.  Aggregate Fluctuations from Independent Sectoral Shocks: Self-Organized Criticality in a Model of Production and Inventory Dynamics , 1992 .

[13]  Andrei Khrennikov Linear representations of probabilistic transformations induced by context transitions , 2001 .

[14]  B. Mandelbrot The Variation of Certain Speculative Prices , 1963 .

[15]  L. Bachelier,et al.  Théorie de la spéculation , 1900 .

[16]  P. Dirac Principles of Quantum Mechanics , 1982 .

[17]  Andrei Khrennikov Classical and quantum mechanics on information spaces with applications to cognitive, psychological, social and anomalous phenomena , 2000 .

[18]  Aaas News,et al.  Book Reviews , 1893, Buffalo Medical and Surgical Journal.

[19]  F. S. Marvin Process and Reality: an Essay in Cosmology , 1930, Nature.

[20]  H. Markowitz,et al.  The Random Character of Stock Market Prices. , 1965 .

[21]  A. Einstein Die Plancksche Theorie der Strahlung und die Theorie der spezifischen Wärme [AdP 22, 180 (1907)] , 2005, Annalen der Physik.

[22]  H. S. Allen The Quantum Theory , 1928, Nature.

[23]  QUANTUM THEORY, INFORMATION DYNAMICS AND THE RELATIONSHIP BETWEEN MIND AND MATTER , 2001 .