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Critique and comment. Zeeman's unstable stock exchange
Author(s) -
Weintraub E. Roy
Publication year - 1983
Publication title -
behavioral science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.371
H-Index - 45
eISSN - 1099-1743
pISSN - 0005-7940
DOI - 10.1002/bs.3830280109
Subject(s) - zeeman effect , irrational number , economics , stock exchange , stock market , stock (firearms) , catastrophe theory , standard deviation , econometrics , financial economics , physics , mathematical economics , statistical physics , mathematics , quantum mechanics , geology , finance , materials science , statistics , paleontology , geometry , geotechnical engineering , horse , magnetic field , metallurgy
The stock market is a simple market system. Zeeman's dynamic analysis, using catastrophe theory, of stock prices is shown to be equivalent to a standard economic model in which price movements produce deviation—amplifying feedbacks. Zeeman's catastrophe result in this system is thus based on an implicit assumption of irrational behavior.