Gauge field theory of market dynamics: Toward a solution of the "man vs. men" dilemma

Yang, Yingrui (2015): Gauge field theory of market dynamics: Toward a solution of the "man vs. men" dilemma.

Abstract

The current economics and psychology are developed within the Newtonian tradition in physics from both conceptual and instrumental perspectives. This paper aims to integrate economics and cognitive science by applying gauge field theory of modern theoretical physics. Many controversies between normative theories and behavioral theories are characterized by the “man vs. men” dilemma. Gauge potential and gauge field strength is constructed at both the man-level and the men-level in order to satisfy the principle of gauge invariance. To maintain the Lagrangian density function invariant, the gauge transformations of the first kind and the second kind are performed at the man-level and the men-level, respectively. The market dynamics is modeled by the logic of electrodynamics. The interactions of the market and individual participants are formulated by the logic of electromagnetic coupling. In establishing the market dynamic equations, individual utility function serves as gauge function and efficiency provides gauge freedom.

• Item Type: MPRA Paper
• Language: English
• Keywords: bounded rationality; economic rational man; electrodynamics; gauge theory; market dynamics; cognitive field
• Subjects: A - General Economics and Teaching > A1 - General Economics; A - General Economics and Teaching > A1 - General Economics > A12 - Relation of Economics to Other Disciplines; C - Mathematical and Quantitative Methods > C0 - General; C - Mathematical and Quantitative Methods > C0 - General > C02 - Mathematical Methods; D - Microeconomics > D0 - General; D - Microeconomics > D0 - General > D01 - Microeconomic Behavior: Underlying Principles; D - Microeconomics > D0 - General > D03 - Behavioral Microeconomics: Underlying Principles

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