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.
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.
- 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