Stock Market Speculation: Spontaneous Symmetry Breaking of Economic Valuation

Firm foundation theory estimates a security's firm fundamental value based on four determinants: expected growth rate, expected dividend payout, the market interest rate and the degree of risk. In contrast, other views of decision-making in the stock market, using alternatives such as human psychology and behavior, bounded rationality, agent-based modeling and evolutionary game theory, expound that speculative and crowd behavior of investors may play a major role in shaping market prices. Here, we propose that the two views refer to two classes of companies connected through a ``phase transition''. Our theory is based on 1) the identification of the fundamental parity symmetry of prices ($p \to -p$), which results from the relative direction of payment flux compared to commodity flux and 2) the observation that a company's risk-adjusted growth rate discounted by the market interest rate behaves as a control parameter for the observable price. We find a critical value of this control parameter at which a spontaneous symmetry-breaking of prices occurs, leading to a spontaneous valuation in absence of earnings, similarly to the emergence of a spontaneous magnetization in Ising models in absence of a magnetic field. The low growth rate phase is described by the firm foundation theory while the large growth rate phase is the regime of speculation and crowd behavior. In practice, while large ``finite-time horizon'' effects round off the predicted singularities, our symmetry-breaking speculation theory accounts for the apparent over-pricing and the high volatility of fast growing companies on the stock markets.Comment: 23 pages, 10 figure

Reentrant Phase Transitions of the Blume-Emery-Griffiths Model for a Simple Cubic Lattice on the Cellular Automaton

The spin-1 Ising (BEG) model with the nearest-neighbour bilinear and biquadratic interactions and single-ion anisotropy is simulated on a cellular automaton which improved from the Creutz cellular automaton(CCA) for a simple cubic lattice. The simulations have been made for several sets of parameters $K/J$ and $D/J$ in the $-3<D/J\leq 0$ and $-1\leq K/J\leq 0$ parameter regions. The re-entrant and double re-entrant phase transitions of the BEG model are determined from the temperature variations of the thermodynamic quantities ($M$, $Q$ and $\chi$). The phase diagrams characterizing phase transitions are compared with those obtained from other methods.Comment: 12 pages 7 figure

A Spin - 3/2 Ising Model on a Square Lattice

The spin - 3/2 Ising model on a square lattice is investigated. It is shown that this model is reducible to an eight - vertex model on a surface in the parameter space spanned by coupling constants J, K, L and M. It is shown that this model is equivalent to an exactly solvable free fermion model along two lines in the parameter space.Comment: LaTeX, 7 pages, 1 figure upon request; JETP Letters, in pres

Exact correlation functions of Bethe lattice spin models in external fields

We develop a transfer matrix method to compute exactly the spin-spin correlation functions of Bethe lattice spin models in the external magnetic field h and for any temperature T. We first compute the correlation function for the most general spin - S Ising model, which contains all possible single-ion and nearest-neighbor pair interactions. This general spin - S Ising model includes the spin-1/2 simple Ising model and the Blume-Emery-Griffiths (BEG) model as special cases. From the spin-spin correlation functions, we obtain functions of correlation length for the simple Ising model and BEG model, which show interesting scaling and divergent behavior as T approaches the critical temperature. Our method to compute exact spin-spin correlation functions may be applied to other Ising-type models on Bethe and Bethe-like lattices.Comment: 19 page

Quantum computation based on d-level cluster states

The concept of qudit (a d-level system) cluster state is proposed by generalizing the qubit cluster state (Phys. Rev. Lett. \textbf{86}, 910 (2001)) according to the finite dimensional representations of quantum plane algebra. We demonstrate their quantum correlations and prove a theorem which guarantees the availability of the qudit cluster states in quantum computation. We explicitly construct the network to show the universality of the one-way computer based on the defined qudit cluster states and single-qudit measurement. And the corresponding protocol of implementing one-way quantum computer can be suggested with the high dimensional "Ising" model which can be found in many magnetic systems.Comment: Revtex4, 15 pages, 3 eps figure

3-cocycles, non-associative star-products and the magnetic paradigm of R-flux string vacua

We consider the geometric and non-geometric faces of closed string vacua arising by T-duality from principal torus bundles with constant H-flux and pay attention to their double phase space description encompassing all toroidal coordinates, momenta and their dual on equal footing. We construct a star-product algebra on functions in phase space that is manifestly duality invariant and substitutes for canonical quantization. The 3-cocycles of the Abelian group of translations in double phase space are seen to account for non-associativity of the star-product. We also provide alternative cohomological descriptions of non-associativity and draw analogies with the quantization of point-particles in the field of a Dirac monopole or other distributions of magnetic charge. The magnetic field analogue of the R-flux string model is provided by a constant uniform distribution of magnetic charge in space and non-associativity manifests as breaking of angular symmetry. The Poincare vector comes to rescue angular symmetry as well as associativity and also allow for quantization in terms of operators and Hilbert space only in the case of charged particles moving in the field of a single magnetic monopole