Eur. Phys. J. B (2016) 89: 146
https://doi.org/10.1140/epjb/e2016-60248-y

Regular Article

Modeling of price and profit in coupled-ring networks

NECTEC-MU Collaborative Research Unit on Quantum Information, Department of Physics, Faculty of Science, Mahidol University, 10400 Bangkok, Thailand

^a e-mail: sujin.suw@mahidol.ac.th

Received: 27 March 2015
Received in final form: 16 November 2015
Published online: 8 June 2016

Abstract

We study the behaviors of magnetization, price, and profit profiles in ring networks in the presence of the external magnetic field. The Ising model is used to determine the state of each node, which is mapped to the buy-or-sell state in a financial market, where +1 is identified as the buying state, and −1 as the selling state. Price and profit mechanisms are modeled based on the assumption that price should increase if demand is larger than supply, and it should decrease otherwise. We find that the magnetization can be induced between two rings via coupling links, where the induced magnetization strength depends on the number of the coupling links. Consequently, the price behaves linearly with time, where its rate of change depends on the magnetization. The profit grows like a quadratic polynomial with coefficients dependent on the magnetization. If two rings have opposite direction of net spins, the price flows in the direction of the majority spins, and the network with the minority spins gets a loss in profit.