On Quantum Ambiguity and Potential Exponential Computational Speed-Ups to Solving Dynamic Asset Pricing Models

2024/05/02 by Éric Ghysels, Ghysels, Eric, Jack Morgan +1 · 1 citation
Computer Science · #FOS: Economics and business #FOS: Physical sciences #Pricing of Securities (q-fin.PR) #Quantum Computing Algorithms and Architecture #Quantum Physics (quant-ph)

paper · pdf · doi:10.48550/arxiv.2405.01479

openalex publication_date 2024/05/02 · openalex created_date 2024/05/05 · openalex updated_date 2026/07/28

Abstract

We formulate quantum computing solutions to a large class of dynamic nonlinear asset pricing models using algorithms, in theory exponentially more efficient than classical ones, which leverage the quantum properties of superposition and entanglement. The equilibrium asset pricing solution is a quantum state. We introduce quantum decision-theoretic foundations of ambiguity and model/parameter uncertainty to deal with model selection.

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