One of the most iconic and influential graphics in economics is the figure showing supply and demand as two lines sloping in opposite directions, with the point at which they intersect representing the equilibrium price which perfectly balances supply and demand. The figure, which dates back to...

Perhaps the best-known result from neoclassical economics is the “law of supply and demand”, which depicts markets using curves of supply and demand that intersect at a unique equilibrium. However because it is impossible to separate out supply and demand in practice, the model has little in...

This paper presents a quantum harmonic oscillator model of price fluctuations in a stock market. The model builds on a previously-published quantum model of supply and demand, and is compared with other existing quantum models of stock markets, including quantum harmonic oscillator, square-well,...

According to the field of quantum cognition, a decision to act is best expressed as a quantum process, where entangled ideas and feelings combine and interfere in the mind to produce a complex, context-dependent response. While the quantum approach has proved successful at modelling many aspects...

The Black-Scholes model, which is widely used to price financial options, assumes that volatility is constant as a function of strike price. However when market option prices are used to infer the volatility that is implied by those prices, it often exhibits a marked dependence on strike price...

The publication of the Black-Scholes formula in 1973 appeared for the first time to put the pricing of financial options onto a rational and objective basis. While earlier option-pricing models relied on a subjective estimate of the stock’s uncertain future growth rate, the Black-Scholes model...