Econophysics is an interdisciplinary science that studies the dynamic behavior of finance and economic markets.
In order to solve the problems of economics and also to understand the dynamic behavior of the market, the econo-physicists develop applied theories.
Econophysics, sometime, is also known as the physics of finance.
It applies statistical mechanics for the economic analysis.
The econophysics questions include −
How to accurately measure and explain the significant properties of market dynamics?
How to stabilize the markets?
What are the different behaviors in different markets?
The fundamental tools of econophysics are −
These two methods are borrowed from statistical physics.
Other tools taken from Physics
Following are the major models those are used in Econophysics −
Kinetic exchange models of markets
Random matrix theory