Econophysics, Financial Markets, and Artificial Intelligence

A special issue of Mathematics (ISSN 2227-7390). This special issue belongs to the section "Financial Mathematics".

Deadline for manuscript submissions: 31 March 2025 | Viewed by 1013

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Department of Computer Science and Systems Engineering, Faculty of Science, University of Zaragoza, 50009 Zaragoza, Spain
Interests: complexity and chaos; econophysics; nonlinear models; multiagent systems
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Special Issue Information

Dear Colleagues,

Econophysics emerged at the beginning of this century as a beacon of innovation in the frontier between statistical physics and economy in a context where conventional economic theories struggle to explain the complexities of global markets. Through blending the principles of physics with the dynamics of financial systems, many different ideas and models have been proposed to unlock the hidden laws governing economic phenomena. These mathematical models delve into the intricate interactions between millions of agents, uncovering underlying patterns and universal principles through computational simulations and also analytical calculations. These new research approaches to the market have revealed surprising insights into how markets can decay to statistical equilibrium and the systemic risks that can generate new behaviors and different statistical wealth distributions. Yet, their use is not without controversy, as traditional economists clash with their unconventional approach. Today, a groundbreaking alliance has emerged between econophysics and artificial intelligence. In this Special Issue, papers that aim to reunite both worlds are welcome. By taking advantage of the power of machine learning algorithms, new ideas can emerge on how to implement intelligence into economic agents and mathematical models to delve into the dynamics of markets, attempting to unveil hidden correlations and nonlinear relationships and revolutionizing how we understand economic systems.

Prof. Dr. Ricardo Lopez-Ruiz
Guest Editor

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Keywords

  • econophysics
  • agent-based modeling
  • financial markets
  • machine learning
  • neural networks
  • reinforcement learning
  • market prediction
  • algorithmic trading
  • computational finance
  • nonlinear dynamics

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Published Papers (1 paper)

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Research

49 pages, 2072 KiB  
Article
Game Theory for Predicting Stocks’ Closing Prices
by João Costa Freitas, Alberto Adrego Pinto and Óscar Felgueiras
Mathematics 2024, 12(17), 2676; https://doi.org/10.3390/math12172676 - 28 Aug 2024
Viewed by 746
Abstract
We model the financial markets as a game and make predictions using Markov chain estimators. We extract the possible patterns displayed by the financial markets, define a game where one of the players is the speculator, whose strategies depend on his/her risk-to-reward preferences, [...] Read more.
We model the financial markets as a game and make predictions using Markov chain estimators. We extract the possible patterns displayed by the financial markets, define a game where one of the players is the speculator, whose strategies depend on his/her risk-to-reward preferences, and the market is the other player, whose strategies are the previously observed patterns. Then, we estimate the market’s mixed probabilities by defining Markov chains and utilizing its transition matrices. Afterwards, we use these probabilities to determine which is the optimal strategy for the speculator. Finally, we apply these models to real-time market data to determine its feasibility. From this, we obtained a model for the financial markets that has a good performance in terms of accuracy and profitability. Full article
(This article belongs to the Special Issue Econophysics, Financial Markets, and Artificial Intelligence)
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