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2023 | OriginalPaper | Buchkapitel

5. Quantum Financial Entanglement: The Case of Strategic Default

verfasst von : David Orrell

Erschienen in: Quantum Decision Theory and Complexity Modelling in Economics and Public Policy

Verlag: Springer International Publishing

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Abstract

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 modeling many aspects of human behavior, it may be less clear how relevant this is to the economy. This paper argues that the financial system is characterized by three kinds of entanglement: at the individual level between concepts, at the social level with other people, and at the financial level through the use of credit. These entanglements combine in such a way that cognitive processes at the individual level scale up to affect the economy as a whole, in a manner which is best modeled using quantum techniques. The approach is illustrated by making a retroactive “postdiction” about the prevalence of strategic mortgage default during the financial crisis.

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Titel: Quantum Financial Entanglement: The Case of Strategic Default
verfasst von: David Orrell
Verlag: Springer International Publishing
Buch: Quantum Decision Theory and Complexity Modelling in Economics and Public Policy
Print ISBN: 978-3-031-38832-3

Electronic ISBN: 978-3-031-38833-0

Copyright-Jahr: 2023
DOI: https://doi.org/10.1007/978-3-031-38833-0_5

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