Quantum Financial Economics - Risk and Returns

TL;DR

This paper introduces a quantum game-theoretic model linking financial volatility risk to business cycle dynamics, revealing turbulence and multifractal patterns in returns and risk behavior.

Contribution

It presents a novel evolutionary quantum game framework that captures complex financial volatility phenomena and compares simulated results with real market data.

Findings

Model reproduces turbulence and multifractal signatures in financial data

Simulations align with actual volatility patterns

Highlights the role of intrinsic time in risk dynamics

Abstract

Financial volatility risk and its relation to a business cycle-related intrinsic time is addressed through a multiple round evolutionary quantum game equilibrium leading to turbulence and multifractal signatures in the financial returns and in the risk dynamics. The model is simulated and the results are compared with actual financial volatility data.