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arxiv: math/0410115 · v1 · submitted 2004-10-05 · 🧮 math.PR

Utility maximizing entropy and the second law of thermodynamics

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keywords entropysecondthermodynamicsutilityclassicalconditiondefinitiondemonstrated
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Expected utility maximization problems in mathematical finance lead to a generalization of the classical definition of entropy. It is demonstrated that a necessary and sufficient condition for the second law of thermodynamics to operate is that any one of the generalized entropies should tend to its minimum value of zero.

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