live logic
Why It Matters
Where markets break.
Below the critical temperature Tc, spins lock together, magnetization spikes, and a small bias cascades through the whole lattice. Above Tc, the system is noise.
Markets near a phase transition show divergent susceptibility, where small inputs trigger huge moves. Critical slowing down becomes a measurable early-warning signal for regime shifts.
Model Logic
The Hamiltonian turns alignment into energy.
Each lattice site holds a binary spin, +1 or -1, and interacts with nearest neighbors through coupling J and an external field h. Magnetization, the average spin, is the order parameter that captures collective opinion in one number.
Below Tc: spins align, magnetization spikes.
Above Tc: noise, no collective behavior.
Susceptibility diverges at the critical point.
Critical slowing down warns of regime shifts.