Network Complexity and Financial Behavior – Volume Distribution over Price in Financial Market

Current study has revealed that it is time to move beyond behavioral finance to social finance in network complexity, which studies the structure of social interactions. Some pioneering scholars in economics and finance have provided a considerable number of empirical evidences of how financial ideas transmit, spread and evolve, and how social processes affect financial outcomes. However, there is big challenge to have a widely acceptable theory in the social finance. After a brief perspective on the historical development from network theories to complex networks, here we focus on the application in finance. We propose a unified theory and two sets of explicit volume distribution models over a price range from Shi’s wave equation in a new mathematical method. The theory is also evidenced validity by the empirical evidence on nonlinear V-shaped price pressures utility. It predicts the policies effective about quarantine and mask wearing against COVID-19 pandemics.