Patterns of Speculation: A Study in Observational Econophysics
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| Pages |
246 |
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| Published Date |
2002 |
Patterns of Speculation: A Study in Observational Econophysics is to show that behind the bewildering diversity of historical speculative episodes, it is possible to find hidden regularities.
Author’s Introduction:
There are four main parts to this book which, although related, are fairly distinct. The first part presents the main ideas (as seen by the present author) on which are based the econophysical approach to economic phenomena.
In particular I emphasize that this approach continues a century-long tradition in empirical and comparative analysis. Biophysics, astrophysics, neurophysics constitute three examples where the approach used by physicists was applied to other fields; as these cases have a much longer historical record than econophysics (biophysics, for instance began in the nineteenth century) it can be of interest to examine these cases more closely in order to identify the factors which brought about their fruitful development.
The second and third parts aim to discover qualitative and quantitative regularities in the organization and evolution of speculative markets. The analysis emphasizes that all speculative bubbles are “rational,” in the sense that the expectations of investors are consistent with the preconceptions and social climate that prevailed at that time.
In other words, the rigid concept of rationality symbolized by the so-called homo economicus will be replaced by an extended concept of social rationality. If one looks at speculative bubbles by focusing on social behavior, deep similarities become visible beyond apparently distinct phenomena.
In our analysis of qualitative regularities one of our main threads will be the theme of social productivity: many of the changes in the organization of markets came about as an attempt to perform the same function at a smaller social cost. The final part of the book proposes some elements for a theory of speculative price peaks.
Contents:
- WHY ECONOPHYSICS?
- THE BEGINNINGS OF ECONOPHYSICS
- SOCIAL MAN VERSUS HOMO ECONOMICUS
- ORGANIZATION OF SPECULATIVE MARKETS
- COLLECTIVE BEHAVIOR OF INVESTORS
- SPECULATIVE PEAKS: STATISTICAL REGULARITIES
- TWO CLASSES OF SPECULATIVE PEAKS
- DYNAMICS OF SPECULATIVE PEAKS: THEORETICAL FRAMEWORK
- THEORETICAL FRAMEWORK: IMPLICATIONS
Patterns of Speculation: A Study in Observational Econophysics By Bertrand M. Roehner pdf
3 reviews for Patterns of Speculation: A Study in Observational Econophysics
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Adrian Padilla (verified owner) –
“The author presents an excellent description…. It is a very pleasant read…. the book is worth reading to anyone interested in these matters.
Aliyah Dyer (verified owner) –
Econophysics a relative, new and exciting field often (and justifiably?) suffers from bad press, as this definition taken from […] points out:
“It is the application of the principles of mathematical physics to the study of financial markets. Experts are beginning to discover that the world economy behaves like a collection of electrons or a group of water molecules that interact with each other. With new tools of statistical analysis, like the recent breakthroughs in understanding chaotic systems, it is beginning to be possible to make sense of these hugely complicated systems (one year of the world’s financial markets produces about 24 CD-ROMs’ worth of data, so there’s no shortage of material to number-crunch). As a result, specialists are addressing a variety of questions that are difficult or impossible to understand using conventional economic principles: Is the market random, or is there any underlying order? In particular, are there any long-term trends that can be foretold? Are financial crashes inevitable? Someone who is an expert in this arcane field is an econophysicist.”
Here in lies its weakness, eoconphysics is percieved not only as mathematically, but also as conceptually non intutive and difficult for anyone but the the seasoned physicsist or mathematician who has had years of prior experience in statistics and mathematical physics in order to grasp both the qualitative and quantative flavor of the burgeoning filed!
Perhaps this was true until the advent of books like this, it is simple, straightforward approach not only captures the essence of the field but also provides useful history on the evolution of the field as a new sub discipline.
The text is remarkably readable and is accessible not only to graduate and undergraduate students in Physics and Economics but perhaps even to a good high school student with a working knowledge of statistics and calculus, with its focus on comparative empirical studies and the construction of models that reflect data as opposed to theory.
Each chapter presents plenty of data and the author at each step explains not only economically but also physically what is occurring as he builds his models and explains his methods of analysis.
This is an excellent self contained book and a joy to read.
Maggie Salgado (verified owner) –
This book is very technical and has good information, but it is not up to date as it was written in 2002.