Quantum game theory and Keynesian Economics

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The commonly accepted quantum theory can be used to predict optimal outcomes in social phenomena, i.e. the economy. To bad, we (i.e. the government) obviously doesn't use it to set financial policy.

Every year thousands of introductory economics students are made to accept as valid one of Keynes's lasting inversions of classical economics, namely the proposition that saving may be a private virtue, but is a public vice. According to Keynes, a community that seeks to increase its rate of saving would end up impoverishing itself and actually saving less, but the community that increases its consumption at the expense of saving would end up being richer and saving more. This proposition, frequently stated in macroeconomics textbooks as the "paradox of thrift," arises mainly from Keynes's definition of saving to include the hoarding of cash, contrary to the classical definition and language of the marketplace, but has received little recognition or criticism as such.

The classical theory of growth against which Keynes proposed his paradox of thrift argument simply states that economic growth is determined by the rate of saving or capital accumulation. The greater the amount saved out of income, the more capital goods, land, and labour services can be bought or hired for production.

Up until recently the decision of who is correct has been primarily the domain of politicians who select the economist that sets the fed's policies to encourage or discourage savings through manipulating the prime rate, tax laws, and other such tools of the politician.

Physics and mathematicians have been silently developing concepts of Quantum game theory. Quantum game theory is being applied to economic theory for proving optimal strategies in decision theory. (I'll spare you the reading through physics equations: SAVE!)

If Quantum game theory sounds like something out of Star Trek, that's because there is a made up series. This episode is sometimes known as the "Meyer's Penny" by quantum game theorist. It can be found in the book "A Beautiful Math" by Tom Siegfried. (To bad we can't get our politician to read the bills they vote for, suppose getting them to read this book would be classified as a quantum impossibility.)

Well, we can't do much about the politician till the next election. But till then, before you make your next major investment: if you use an advior ask your investment adviser if they are familiar with Quantum game theory. If you use software ask the vendor if the software analysis is based on Quantum game theory, if not get one that is.

Best starting point I can think of if you want to learn more about this subject is the paper Quantum Game Theory in Finance you can skim past the math and read the text.