Please use this identifier to cite or link to this item:
Title: On the "usual" misunderstandings between econophysics and finance: Some clarifications on modelling approaches and efficient market hypothesis
Authors: Ausloos, Marcel
Jovanovic, Franck
Schinckus, Christophe
First Published: 4-Jun-2016
Publisher: Elsevier
Citation: International Review of Financial Analysis, 2016, 47, pp. 7-14
Abstract: In line with the recent research and debates about econophysics and financial economics, this article discusses on usual misunderstandings between the two disciplines in terms of modelling and basic hypotheses. In the literature devoted to econophysics, the methodology used by financial economists is frequently considered as a top-down approach (starting from a priori "first principles") while econophysicists rather present themselves as scholars working with a (empirical data prone) bottom-up approach. Although this dualist perspective is very common in the econophysics literature, this paper claims that the distinction is very confusing and does not permit to reveal the essence of the differences between finance and econophysics. The distinction between these two fields is mainly investigated here through the lens of the Efficient Market Hypothesis in order to show that, in substance, econophysics and financial economics tend to have a similar approach implying that the misunderstanding between these two fields at the modelling level can therefore be overstepped.
DOI Link: 10.1016/j.irfa.2016.05.009
ISSN: 1057-5219
Version: Post-print
Status: Peer-reviewed
Type: Journal Article
Rights: Creative Commons “Attribution Non-Commercial No Derivatives” licence CC BY-NC-ND, further details of which can be found via the following link: Archived with reference to SHERPA/RoMEO and publisher website.
Description: JEL classification: G1, B4, B5
Appears in Collections:Published Articles, School of Management

Files in This Item:
File Description SizeFormat 
1606.02045v1.pdfPost-review (final submitted author manuscript)700.76 kBAdobe PDFView/Open

Items in LRA are protected by copyright, with all rights reserved, unless otherwise indicated.