What’s the use of econophysics?

Mark Buchanan has the answers:

1. More than anything, physicists have helped to establish empirical facts about financial markets; for example, that the probability of large market movements (up or down) decreases in accordance with an inverse cubic power law in many diverse markets…

4. Work in econophysics — through the study of minimal models such as the minority game — has also revealed surprising qualitative features of markets; for example, that a key determinant of market dynamics is the diversity of participants’ strategic behaviour…

7. On a similar theme, fundamental analysis by physicists has examined the relationship between market efficiency and stability.

Go read about 8 success stories of econophysics. Whenever I delve into the econophysics literature, it mostly seems…pretty boring and bad. But there’s some good stuff out there! You just have to find it.

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