The Beneficial Role of Random Strategies in Social and Financial Systems

Abstract

In this paper we focus on the beneficial role of random strategies in social sciences by means of simple mathematical and computational models. We briefly review recent results obtained by two of us in previous contributions for the case of the Peter principle and the efficiency of a Parliament. Then, we develop a new application of random strategies to the case of financial trading and discuss in detail our findings about forecasts of markets dynamics.

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Notes

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    The paper was quoted by several blogs and specialized newspapers, among which the MIT blog the New York Times and the Financial Times, and it was also awarded the IG Nobel prize 2010 for “Management”. See also [34].

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Correspondence to Andrea Rapisarda.

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Biondo, A.E., Pluchino, A. & Rapisarda, A. The Beneficial Role of Random Strategies in Social and Financial Systems. J Stat Phys 151, 607–622 (2013). https://doi.org/10.1007/s10955-013-0691-2

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Keywords

  • Random strategies
  • Sociophysics
  • Efficiency
  • Numerical simulations
  • Peter Principle
  • Parliament
  • Financial Strategy
  • Financial Markets
  • Expectations
  • Momentum
  • RSI