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Physics of fashion fluctuations

Author

Listed:
  • Donangelo, R.
  • Hansen, A.
  • Sneppen, K.
  • Souza, S.R.

Abstract

We consider a market where many agents trade different types of products with each other. We model development of collective modes in this market, and quantify these by fluctuations that scale with time with a Hurst exponent of about 0.7. We demonstrate that individual products in the model occasionally become globally accepted means of exchange, and simultaneously become very actively traded. Thus collective features similar to money spontaneously emerge, without any a priori reason.

Suggested Citation

  • Donangelo, R. & Hansen, A. & Sneppen, K. & Souza, S.R., 2000. "Physics of fashion fluctuations," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 287(3), pages 539-545.
    • Handle: RePEc:eee:phsmap:v:287:y:2000:i:3:p:539-545
    DOI: 10.1016/S0378-4371(00)00391-5
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    References listed on IDEAS

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    1. J. Doyne Farmer, 2000. "Physicists Attempt To Scale The Ivory Towers Of Finance," International Journal of Theoretical and Applied Finance (IJTAF), World Scientific Publishing Co. Pte. Ltd., vol. 3(03), pages 311-333.
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    7. Youssefmir, Michael & Huberman, Bernardo A & Hogg, Tad, 1998. "Bubbles and Market Crashes," Computational Economics, Springer;Society for Computational Economics, vol. 12(2), pages 97-114, October.
    8. Donangelo, Raul & Hansen, Alex & Sneppen, Kim & Souza, Sergio R., 2000. "Modelling an imperfect market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 283(3), pages 469-478.
    9. Jean-Philippe Bouchaud & Rama Cont, 1998. "A Langevin approach to stock market fluctuations and crashes," Science & Finance (CFM) working paper archive 500027, Science & Finance, Capital Fund Management.
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