March 28, 2024

QEF01 - Introduction to Quantum Economics and Finance



Published May 21, 2023, 1:20 a.m. by Naomi Charles


Quantum Economics and finance is a new and exciting field of study that explores the role of quantum mechanics in economic and financial systems. This interdisciplinary field of research is still in its infancy, but is already shedding new light on some of the most important questions in economics and finance.

One of the key insights of quantum economics and finance is that the behavior of economic and financial systems cannot be fully explained by classical economic theories alone. Quantum mechanics provides a new framework for understanding how these systems work, and how they might be manipulated to achieve desired outcomes.

In recent years, quantum economics and finance has been applied to a variety of problems, including the financial crisis of 2008 and the Euro crisis. These studies have shown that quantum effects can play a significant role in economic and financial systems, and that traditional approaches to these problems may need to be reconsidered in light of this new knowledge.

The field of quantum economics and finance is still in its early stages, but it has already begun to revolutionize our understanding of the economic and financial world. With further research, it is sure to provide even more insights into the workings of these complex systems.

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hello and welcome to this talk on

quantum economics and finance

quantum economics and finance uses

quantum mathematics to model phenomena

including cognition financial

transactions and the dynamics of money

and credit

and we'll be talking about topics

including why quantum in the first place

quantum probability and logic basics of

quantum computing

quantum cognition quantum walk quantum

game theory

quantum supply and demand threshold

effects

option pricing and the money bomb so why

quantum in the first place quantum

revolution

in physics was born when physicists

found that at the subatomic level energy

was always exchanged in terms of

discrete parcels

which they called quanta from the latin

for how much

in economics the equivalent is financial

transactions like when you buy an ice

cream in italy and you say

quanto costa which makes the quantum

connection a little clearer

so money behaves in some ways like an

object but not a classical one it shows

signature properties of quantum systems

such as

discreteness indeterminacy entanglement

duality

interference and so on perhaps the most

obvious such property is the

way that money jumps uh in in physics

irvine schrodinger

said if we have to go on with these

damned quantum jumps then i'm sorry that

i ever got involved

in with uh financial transactions of

course the same thing happens all the

time like when you tap your car to

destroy the money doesn't flow out

continuously it just

jumps in physics the

position of a particle is fundamentally

indeterminate and

is in a sense constructed by the

measurement procedure it's the same

thing

in markets if you push your house up for

sale you

will have a fuzzy idea of the price but

the actual

monetary value is only determined at the

moment of the sale

and this is money's job it's a way to

collapse value

down to number we often talk about money

but

one thing that isn't often emphasized is

just the

most basic feature which is is its

connection with numbers so if you look

at a

us dollar bill for example you see it

says

uh one numerical one and a word one in

each corner

so it's got quite a few ones and then

it's got uh

one dollar down at the bottom and a big

one in the middle and there's a lot more

ones on the other side

so they're really emphasizing the

connection with one and that is money's

most basic

property that it combines the properties

of an own thing

with a number these dual properties are

reflected in the two main historical

theories of money which are

bullionism money is gold and nothing

else is jp morgan's head

and chartalism which is the idea that

credit alone is money as alfred mitchell

instead

in the next year but then bitcoin comes

along and on the one hand it seems to be

completely virtual

but on the other hand it's also real as

you'll notice if you happen to

lose the hard drive in which your

bitcoins are located

and the duality of money therefore

uh is similar to the duality of light so

wave particle complementarity has been

reflected in theories of light go back

millennia

uh so aristotle thought light was a wave

and

newton thought it was uh particles and

sort of bounced back and forth until

finally um

the quantum theory came along and showed

that it has properties of both

at the same time it's the same with

money

um in in economics we're used to

treating preferences as

sort of fixed and known objects with

some

cognitive biases but often our

preferences are made up in response to

questions which act like a kind of a

measurement event so thoughts and ideas

behave in some ways like objects but

they're not classical objects

in physics bohr's theory of wave

particle complementarity

was actually inspired by the observation

from psychologists

that we can hold opposite ideas in the

mind at the same time

in superposition and in fact it's these

interference terms which play a very

important role

in quantum cognition as we'll see

in physics particles can mysteriously

become entangled so they act as a single

system and the financial system

will see a much more direct form of

entanglement where

financial assets and virtual liabilities

have these quantum characteristics

of entanglement

in economics uh there's this idea of

rational economic man is kind of like a

robot

the picture which is emerging from

quantum social science is a

quantum economic person who's entangled

indeterminate dynamic

paradoxical and alive as the philosopher

slavoy

zizek said a fact rarely notices that

you know quantum physics

appears to defy our common sense view of

material reality

but it seems to apply somewhat better to

uh the sort of human reality where the

human spirit

encounters itself outside itself

okay so pop quiz what is quantum

economics

is it a about discoveries that

economists have made by studying tiny

tiny amounts of money

no b about the idea that by attuning

ourselves with an evolving economic

consciousness field we can both get in

touch with the universe and become rich

no unfortunately c

physics envy taken to its logical

conclusion

no no there is a danger of that but as

we'll see the rest of these talks

really don't touch on physics very much

at all

or d about the idea that the money

system has quantum properties of its own

such as indeterminacy duality

interference and entanglement

which scale up and affect the economy as

a whole

the correct answer is of course d

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