{{Afd-merge to|Econophysics|Quantum economics|16 April 2024}}

'''Quantum economics''' applies mathematical methods and ideas from [[quantum physics]] to the field of [[economics]]. It is motivated by the claim that economic processes such as financial transactions can be appropriately modeled using the quantum formalism.

According to an editorial in the inaugural issue of the journal ''Quantum Economics and Finance'', "Quantum economics and finance is the application of probability based on projective geometry—also known as quantum probability—to modelling in economics and finance. It draws on related areas such as quantum cognition, quantum game theory, quantum computing, and quantum physics."<ref name="QEFpaper">{{Cite journal |last=Orrell |first=David |last2=Haven |first2=Emmanuel |last3=Hawkins |first3=Raymond J. |date=2024-01-17 |title=What is Quantum Finance and Economics? |url=http://journals.sagepub.com/doi/10.1177/29767032231210519 |journal=Quantum Economics and Finance |language=en |doi=10.1177/29767032231210519 |issn=2976-7032}}</ref> The field is therefore distinct from areas such as [[econophysics]] because it does not focus exclusively on things like financial statistics and time series, but also considers broader effects from [[quantum social science]] such as [[quantum cognition]] and [[quantum game theory]].

== History ==

This section gives a brief chronological overview of some of the main contributions.<ref name="holtfortpaper">{{cite journal | last1= Holtfort| first1= T| last2= Horsch| first2= A| date=2020|title= Social science goes quantum: Explaining human decision-making, cognitive biases and Darwinian selection from a quantum perspective |journal= Journal of Bioeconomics|volume=25 |pages=99–116 }}</ref><ref>{{cite web |last1=Qadir |first1=Asghar |title= Quantum economics revisited |url=https://www.youtube.com/watch?v=AioFO5tJSgw&ab_channel=QuantumEconomicsandFinance |website=youtube.com |publisher=[[Lahore School of Economics]] |language=en |format=video |date=March 3, 2024}}</ref>

Economists including [[Paul Samuelson]]<ref>{{cite encyclopedia |title= A quantum theory model of economics: Is the co-ordinating entrepreneur just worth his profit? |first= Paul|last= Samuelson |date = 1979 |encyclopedia= The collected scientific papers of Paul A. Samuelson |volume= 4 |location= Cambridge, Mass. |publisher= MIT Press |pages= 104–110}}</ref> and [[Bernard Schmitt (economist)|Bernard Schmitt]] (whose "quantum macroeconomics" treated production as an instantaneous emission<ref>{{cite web | url= https://www.quantum-macroeconomics.info/index.php/language/en/manifesto/ |date= December 2011 |title=Manifesto | access-date=29 March 2019}}</ref>) have found inspiration in quantum theory.

In his 1978 paper ''Quantum Economics'', Pakistani mathematician [[Asghar Qadir]] argued that the formalism of [[quantum mechanics]] is the best mathematical framework for modeling situations where "consumer behavior depends on infinitely many factors and that the consumer is not aware of any preference until the matter is brought up."<ref name="qadirpaper">{{cite journal | last=Qadir | first= Asghar |date=1978 |title= Quantum Economics |journal= Pakistan Economic and Social Review |volume=16 | issue=3/4 |pages=117–126}}</ref> He proposed that, like particles in quantum mechanics, "the individual as an entity ... can be thought of as a point in a [[Hilbert space]]."

During the 1990s, researchers such as economist [[Martin Shubik]], physicist Martin Schaden and social scientist [[Emmanuel Haven]] were beginning to use the quantum formalism to model the uncertainty of stock markets.<ref name="shubikpaper">{{cite journal | last=Shubik | first= M. | date=1999 |title= Quantum economics, uncertainty and the optimal grid size |journal= Economics Letters |volume=64 | issue=3 | pages=277–278| doi= 10.1016/S0165-1765(99)00095-6 }}</ref><ref>{{cite journal |author=Schaden, Martin | title=Quantum Finance | publisher=Physica A|year= 2002 | volume=316 | issue=1–4 |journal=Physica A: Statistical Mechanics and Its Applications |pages=511–538| doi=10.1016/S0378-4371(02)01200-1 | arxiv=physics/0203006 | bibcode=2002PhyA..316..511S | s2cid=204898656 }}</ref><ref>{{cite journal |author=Haven, Emmanuel |title=A discussion on embedding the Black–Scholes option pricing model in a quantum physics setting |publisher=Physica A|year= 2002 |volume=304 |issue=3–4 |journal=Physica A: Statistical Mechanics and Its Applications |pages=507–524|doi=10.1016/S0378-4371(01)00568-4 |bibcode=2002PhyA..304..507H }}</ref>

In a 2016 paper<ref name="orrellpaper">{{cite journal | last= Orrell | first= David | date=2016 |title= A Quantum Theory of Money and Value |journal= Economic Thought |volume=5 | issue=2 | pages=19–28}}</ref> and book<ref name=orrellbook>{{cite book |last1= Orrell |first1= David | last2= Chlupatý |first2= Roman | date= 2016|title= The Evolution of Money |publisher= Columbia University Press | pages = 171–175 | isbn= 978-0231173728}}</ref><ref name="teesearticle">{{cite news | last= Teese |first= Colin |date=11 February 2017 |title=Money and quantum physics |magazine=[[News Weekly]]}}</ref> (the latter co-authored with journalist Roman Chlupatý), the mathematician [[David Orrell]] proposed a [[David Orrell#Quantum theory of money and value|quantum theory of money and value]], which states that money has dualistic, quantum properties because of the way that it merges the exact concept of number with the fuzzy concept of value, and the use of money leads to mental and financial entanglement which can be modeled using quantum methods. In his 2018 book ''Quantum Economics: The New Science of Money''<ref name=orrellbook2>{{cite book |last= Orrell |first= David | date= 2018|title= Quantum Economics: The New Science of Money |publisher= Icon Books | isbn= 978-1785783999}}</ref><ref name="cleggreview">{{cite web | url= http://popsciencebooks.blogspot.com/2018/07/quantum-economics-david-orrell.html | last= Clegg |first= Brian |date= 5 July 2018 |title=Quantum Economics - David Orrell | access-date=17 September 2018}}</ref> and other works <ref name=orrellbook3>{{cite book |last1= Orrell |first1= David | date= 2020|title= Quantum Economics and Finance: An Applied Mathematics Introduction |publisher= Panda Ohana | isbn= 978-1916081611}}</ref><ref name="orrellpaper2">{{cite journal | last= Orrell | first= David | date=2020 |title= A quantum model of supply and demand |journal= Physica A: Statistical Mechanics and Its Applications |volume=539 | pages=122928| doi= 10.1016/j.physa.2019.122928 | bibcode= 2020PhyA..53922928O }}</ref> he described a quantum economics which combined this view of money with the insights of quantum finance and quantum social science. In a 2019 article for the [[Bretton Woods Committee]], [[Andrew Sheng]] wrote that “A quantum paradigm of finance and the economy is slowly emerging, and its nonlinear, complex nature may help the design of a future global economy and financial architecture ... Financial assets and virtual liabilities have quantum characteristics of entanglement with each other that are not yet fully understood."<ref name="sheng">{{cite book |last=Sheng |first=Andrew |title= Revitalizing the Spirit of Bretton Woods: 50 Perspectives on the Future of the Global Economic System |publisher= Bretton Woods Committee |date=July 2019 |pages=360–367 |chapter= A New Bretton Woods Vision for a Global Green New Deal | chapter-url= https://view.flipdocs.com/?ID=10025597_345534#382}}</ref>

The first academic journal dedicated to the area was ''Quantum Economics and Finance'' which began publication in 2024.<ref name="QEFpaper" /><ref name="munarticle">{{cite web | url= https://gazette.mun.ca/research/answering-the-unanswerable/ | last= White |first= Susan |date= 23 November 2023 |title= Answering the unanswerable | access-date=15 April 2023}}</ref>

== Description ==

Quantum economics emphasizes the role of uncertainty in economic decisions<ref name="yukalovpaper">{{cite journal | last1= Yukalov | first1= V.I.| last2= Sornette| first2= D. | date=2016|title= Quantum probability and quantum decision-making |journal= Philosophical Transactions of the Royal Society A |volume=374| issue=2058 |pages=20150100}}</ref> and also stresses the importance of financial transactions and in particular the role of money as an active force in the economy.<ref name=orrellbook /> Quantum economics can therefore be viewed as an alternative to neoclassical economics which begins from a different set of assumptions.<ref name="holtfortpaper" />

Applications of quantum economics include stockmarket analysis<ref name="ahnpaper">{{cite journal | last1= Ahn | first1= K | last2= Choi | first2= MY | last3= Dai | first3= B | last4= Sohn | first4= S | last5= Yang | first5= B | date=2017 |title= Modeling stock return distributions with a quantum harmonic oscillator |journal= Europhysics Letters |volume=120 | issue=3 |pages=38003 }}</ref>, option pricing<ref name="focardipaper">{{cite journal | last1= Focardi | first1= Sergio | last2= Fabozzi| first2= Frank | date=2020|title= Quantum option pricing and quantum finance |journal= Journal of Derivatives |volume=28 | issue=1 |pages=79-98 }}</ref>, portfolio optimization<ref name="halperinpaper">{{cite journal | last= Halperin | first= Igor | date=2020|title= SCOP: Schrödinger Control Optimal Planning for Goal-based Wealth Management |journal= Quantum Economics and Finance |volume=1 | issue=1 }}</ref>, and developing models of markets and decision-making for use with quantum computers.<ref>{{cite news |author=<!--Staff writer(s)/no by-line.--> |date= Nov 6, 2021|title = Schrödinger's markets |newspaper = The Economist}}</ref><ref name="widdowspaper">{{cite journal | last1= Widdows| first1= Dominic | last2= Rani| first2= Jyoti | last3= Pothos | first3= Emmanuel | date=2023|title= Quantum circuit components for cognitive decision-making |journal= Entropy |volume=25 | issue=4 |pages=548 }}</ref>

== References ==

{{Reflist}}

{{Quantum mechanics topics}}

{{Economics}}

[[Category:Mathematical economics]]

[[Category:Quantum mechanics]]

[[Category:Schools of economic thought]]