7th International Conference on Applications of Physics in Financial Analysis

This volume contains contributed papers from the 7th international conference on 'Applications of Physics in Financial Analysis (APFA)' held at Tokyo on 1–5 March 2009. The conference was organized jointly by Tokyo Institute of Technology and Hitotsubashi University with support from the Research Institute of Economy, Trade, and Industry (RIETI), Physical Society of Japan, Japanese Economic Association, Information Processing Society of Japan, Japanese Society for Artificial Intelligence, and Japan Association for Evolutionary Economics. The first APFA conference (APFA1) was held in 1999 at Dublin, followed by APFA2 at Liege in 2000, APFA3 at London in 2001, APFA4 at Warsaw in 2003, APFA5 at Torino in 2006, and APFA6 at Lisbon in 2007. The 7th APFA conference, which is the first meeting held outside Europe, was attended by 223 researchers in physics and economics from 23 countries world-wide. In keeping with past APFA conferences, we paid special attention to issues in financial markets, which turned out to be very timely. The conference was held in March 2009, in the middle of the global financial crisis that originally started in the US and spread quickly to every corner of the world. The topic of the conference is 'New Approaches to the Analysis of Large Scale Business and Economic data'. The rapid development of information and communication technology has enabled financial/non-financial firms to keep detailed records of their business activities in the form of, for example, tick-by-tick data in financial markets, point-of-sale (POS) data on individual household's purchasing activity, and interfirm network data describing relationships among firms in terms of suppliers/customers transactions and ownerships. This growth in the scope and amount of business data available to researchers has led to a far-reaching expansion in research possibilities. Researchers not only in social sciences but also in physics, mathematics, and information sciences have recently become interested in such datasets, conducting empirical investigations about various aspects of economic activities. Specifically, they have searched for regularities and 'laws' akin to the ones in natural science, successfully producing fascinating results, as shown in the papers contained in this volume. Each paper submitted for publication in this volume has gone through the refereeing process, and has been revised on the basis of comments and discussion at the conference as well as comments from the anonymous referees. Finally, 19 papers were accepted for publication. The editors are very grateful to the colleagues involved in the refereeing process for their rapid and careful reviewing of the papers. We thank Takayuki Mizuno, Koji Sakai, Hiwon Yoon and Hiroki Matsui for their support for the conference. We appreciate the administrative assistance provided by Yayoi Hatano of Hitotsubashi University, and Masahiko Ozaki, Masato Yamada and Tomoko Kase of RIETI. We are most grateful to the authors for their contributions, as well as to the participants, all of whom made this conference stimulating and enjoyable. Misako Takayasu Tokyo Institute of Technology, Japan Tsutomu Watanabe Hitotsubashi University, Japan RIETI, Japan Yuichi Ikeda Hitachi Research Laboratory, Hitachi Ltd, Japan Hideki Takayasu Sony Computer Science Laboratories, Inc, Japan