Espen Gaarder Haug is a Norwegian author and quantitative trader specializing in options and other derivatives. He is best known for his book The Complete Guide to Option Pricing Formulas, and is a regular columnist for Wilmott He holds a Ph.D. degree from the Norwegian Univer...
Stochastic space interval as a link between quantum randomness and macroscopic randomness?
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Physica A: Statistical Mechanics and its Applications, ISSN: 0378-4371, Vol: 493, Page: 400-409
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For many stochastic phenomena, we observe statistical distributions that have fat-tails and high-peaks compared to the Gaussian distribution. In this paper, we will explain how observable statistical distributions in the macroscopic world could be related to the randomness in the subatomic world. We show that fat-tailed (leptokurtic) phenomena in our everyday macroscopic world are ultimately rooted in Gaussian – or very close to Gaussian-distributed subatomic particle randomness, but they are not, in a strict sense, Gaussian distributions. By running a truly random experiment over a three and a half-year period, we observed a type of random behavior in trillions of photons. Combining our results with simple logic, we find that fat-tailed and high-peaked statistical distributions are exactly what we would expect to observe if the subatomic world is quantized and not continuously divisible. We extend our analysis to the fact that one typically observes fat-tails and high-peaks relative to the Gaussian distribution in stocks and commodity prices and many aspects of the natural world; these instances are all observable and documentable macro phenomena that strongly suggest that the ultimate building blocks of nature are discrete (e.g. they appear in quanta).