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Stochastic processes from physics to finance wolfgang paul, jörg

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Stochastic processes from physics to finance wolfgang paul, jörg

Wolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom Physics to Finance2nd EditionÔ SpringerWolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom

Stochastic processes from physics to finance wolfgang paul, jörg m Physics to FinanceSecond EditionSpringerWolfgang PaulInstitut fill PhysikMartin-Luther-ưniversitãtHalle (Saale). GermanyJorg BaschnagelInstitut Char

les Sadron ưniversité de Strasbourg Strasbourg. FranceISBN 978-3-319-00326-9ISBN 978-3-319-00327-6 (eBook)DOI 10.1007/978-3-319-00327-6Springer Heidel Stochastic processes from physics to finance wolfgang paul, jörg

berg New York Dordrecht LondonLibrary of Congress Control Number: 2013944566© Springer International Publishing Switzerland 2000. 2013This work is sub

Stochastic processes from physics to finance wolfgang paul, jörg

ject to copyright. All rights arc reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of transl

Wolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom Physics to Finance2nd EditionÔ SpringerWolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom

Stochastic processes from physics to finance wolfgang paul, jörg rmation storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Exe

mpted from this legal reservation arc brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purpos Stochastic processes from physics to finance wolfgang paul, jörg

e of being entered and executed on a computer system, lor exclusive use by the purchaser of the work. Duplication of this publication or parts thereof

Stochastic processes from physics to finance wolfgang paul, jörg

is permitted only under the provisions of the Copyright I .aw of the Publisher's location, in its current version, and permission for use must always

Wolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom Physics to Finance2nd EditionÔ SpringerWolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom

Stochastic processes from physics to finance wolfgang paul, jörg tion under the respective Copyright Law.’Die use of general descriptive names, registered names, trademarks, service marks, etc. in this publication d

ocs not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore Stochastic processes from physics to finance wolfgang paul, jörg

free for general use.While the advice and information in this book are believed to be true and accurate al the date of publication. neither the autho

Stochastic processes from physics to finance wolfgang paul, jörg

rs nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made. Die publisher makes no warranty

Wolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom Physics to Finance2nd EditionÔ SpringerWolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom

Stochastic processes from physics to finance wolfgang paul, jörg w.springcr.eom)Preface to the Second EditionThirteen years have passed by since the publication of the first edition of this book. Its favorable recep

tion encouraged US to work on this second edition. We took advantage of this opportunity to update the references and to correct several mistakes whic Stochastic processes from physics to finance wolfgang paul, jörg

h (inevitably) occurred in the first edition. Furthermore we added several new sections in Chaps. 2.3 and 5. In Chap. 2 we give an introduction to Jay

Stochastic processes from physics to finance wolfgang paul, jörg

nes' treatment of probability theory as a form of logic employed to judge rational expectations and to his famous maximum entropy principle. Additiona

Wolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom Physics to Finance2nd EditionÔ SpringerWolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom

Stochastic processes from physics to finance wolfgang paul, jörg a (generalized) Langevin equation starting from the deterministic Newtonian description of the dynamics. Furthermore there is now also a section abou

t the first passage lime problem for unbounded diffusion as an example of the power of renewal equation techniques and a discussion of the extreme exc Stochastic processes from physics to finance wolfgang paul, jörg

ursions of Brownian motion. Finally we extended the section on Nelson's stochastic mechanics by giving a detailed discussion on the treatment of the t

Stochastic processes from physics to finance wolfgang paul, jörg

unnel effect. Chapter 5 of the first edition contained a discussion of credit risk, which was based on the commonly accepted understanding at that tim

Wolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom Physics to Finance2nd EditionÔ SpringerWolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom

Stochastic processes from physics to finance wolfgang paul, jörg dress a problem that has been discussed much in the recent literature, the (possible) non-stationarity of financial lime series and its consequences.

Furthermore, we extended the discussion of microscopic modeling approaches by introducing agent based modeling techniques. These models allow to corre Stochastic processes from physics to finance wolfgang paul, jörg

late the behavior of the agents—the microscopic ‘degrees of freedom' of the financial market—with the features of the simulated financial time series,

Stochastic processes from physics to finance wolfgang paul, jörg

thereby providing insight into possible underlying mechanisms. Finally, we also augmented the discussion about the description of extreme events in f

Wolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom Physics to Finance2nd EditionÔ SpringerWolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom

Stochastic processes from physics to finance wolfgang paul, jörg Schwiertz for fruitful collaborations on the modeling of financial markets. Without their contribution Chap. 5 would not have its present form.Halle

and Strasbourg.41306Wolfgang Paul Jorg Baschnagel Stochastic processes from physics to finance wolfgang paul, jörg

Wolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom Physics to Finance2nd EditionÔ SpringerWolfgang Paul • Jorg BaschnagelStochastic ProcessesFrom

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