Entropy of an economic system

Discussion in 'Technical Analysis' started by stock_trad3r, Aug 14, 2007.

  1. how to computet the entropy of an economic system and tendency to entropy/disorder
     
  2. Tsallis entropy as applied to the stock market:

    Scroll to eqs 3 & 11. Not a simple calculation. Also, they look at deep out of the money options skewness to determine possible crash potential.


    http://www.sfu.ca/~rgencay/jarticles/crash.pdf

    Make sure to post the graph if you are able to replicate their work for today's market.