Financial Heat Machine

@article{Khrennikov2005FinancialHM,
  title={Financial Heat Machine},
  author={Andrei Yu. Khrennikov},
  journal={Investment management \& financial innovations},
  year={2005},
  volume={1}
}
  • A. Khrennikov
  • Published 2005
  • Mathematics, Physics, Economics, Business, Computer Science
  • Investment management & financial innovations
We consider dynamics of financial markets as dynamics of expectations and discuss such a dynamics from the point of view of phenomenological thermodynamics. We describe a financial Carnot cycle and the financial analog of a heat machine. We see, that while in physics a perpetuum mobile is absolutely impossible, in economics such mobile may exist under some conditions. 

Topics from this paper

Thermodynamic-like Approach to Complexity of the Financial Market (in the Light of the Present Financial Crises)
We consider dynamics of financial markets as dynamics of expectations of its agents and discuss such a dynamics from the point of view of phenomenological thermodynamics.We describe a financialExpand
Macrostate Parameter and Investment Risk Diagrams for 2008 and 2009
In this paper are made some considerations of the application of phenomenological thermodynamics in risk analysis for the transaction on financial markets, using the concept of economic entropy andExpand
Macrostate Parameter, an Econophysics Approach for the Risk Analysis of the Stock Exchange Market Transactions
In this paper we attempt to introduce an econophysics approach to evaluate some aspects of the risks in financial markets. For this purpose, the thermodynamical methods and statistical physicsExpand
An Econophysics Model for Investments using the Law of the Electric Field Flow (Gauss’ Law)
In this paper a new econophysics model of investment processes is proposed and discussed. For this purpose an analogy between the electric field flow and the investment supplying flow with creditsExpand
Decision theory and choices : a complexity approach
General Issues.- Coherence, Complexity and Creativity: the Dynamics of Decision Making.- Complexity Theoretic Bounded Rationality and Satisficing.- Optimisation and "Thoughtful Conjecturing" asExpand
Towards Information Lasers
Recently, the methods of quantum theory (QT), especially quantum information and probability, started to be widely applied outside of physics: in cognitive, social and political sciences, psychologExpand
Social laser model: from color revolutions to Brexit and election of Donald Trump
TLDR
The presented quantum-like model provides the consistent operational model of such complex socio-political phenomenon as SASA, which is the powerful source of social instability and may help to stabilize the modern society. Expand
‘Social Laser’: action amplification by stimulated emission of social energy
  • A. Khrennikov
  • Physics, Sociology
  • Philosophical Transactions of the Royal Society A: Mathematical, Physical and Engineering Sciences
  • 2016
TLDR
A model of social explosions is presented based on a novel approach for the description of social processes, namely the quantum-like approach, and quantum theory is treated simply as an operational formalism—without any direct relation to physics. Expand
Economic thermodynamics
A thermodynamic approach to the description of economic systems and processes is developed. It is shown that there is a deep analogy between the parameters of thermodynamic and economic systemsExpand
Thermodynamics of markets
We consider the thermodynamic approach to the description of economic systems and processes. The first and second laws of thermodynamics as applied to economic systems are derived and analyzed. It isExpand

References

SHOWING 1-10 OF 13 REFERENCES
Thermodynamic analogies in economics and finance: instability of markets
Interest in thermodynamic analogies in economics is older than the idea of von Neumann to look for market entropy in liquidity, advice that was not taken in any thermodynamic analogy presented so farExpand
Quantum Bohmian model for financial market
We apply methods of quantum mechanics for mathematical modeling of price dynamics at the financial market. The Hamiltonian formalism on the price/price-change phase space describes the classical-likeExpand
An Introduction to Econophysics: Correlations and Complexity in Finance
TLDR
Economists and workers in the financial world will find useful the presentation of empirical analysis methods and well-formulated theoretical tools that might help describe systems composed of a huge number of interacting subsystems. Expand
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 toExpand
The Death of Economics
This text questions the abilities of the economists who influence political decisions on the economy. Ormerod aims to show that traditional economists view the world in a way which ensures they willExpand
Bohmian Mechanics In A Macroscopic Quantum System
In the so called ‘causal’ interpretation of quantum mechanics, an electron is considered as a particle and such particle is influenced not only by a classical but also by a so called quantumExpand
Spin Glass Theory and Beyond
This book contains a detailed and self-contained presentation of the replica theory of infinite range spin glasses. The authors also explain recent theoretical developments, paying particularExpand
Information Dynamics in Cognitive, Psychological, Social, and Anomalous Phenomena
List of Figures. Introduction. 1: Processing Information on p-Adic Trees. 1.1. Ultrametric Spaces. 1.2. m-adic Geometry. 1.3. Geometry of Information Spaces. 1.4. Dynamical Processing of Information.Expand
Information dynamics in cognitive, psychological and anomalous phenomena
  • Ser. Fundamental Theories of Physics. Kluwer
  • 2004
Information dynamics in cognitive, psychological and anomalous phenomena. Ser. Fundamental Theories of Physics
  • Dordreht
  • 2004
...
1
2
...