With the City University of Macau (CityU) as the first completion unit, the research paper titled “Inferencing Space Travel Pricing from Mathematics of General Relativity Theory, Accounting Equation, and Economic Functions”, led by Professor Peng Kang-Lin at the Faculty of International Tourism and Management of CityU as the first and corresponding author, with Assistant Professor Xue Xunyue as the second author, CityU Ph.D. graduate Yu Liqiong as the third author, and current master’s student Ren Yixin as the fourth author, was published in the SCI Q1 journal Mathematics.
About the Journal
Mathematics publishes high-quality, peer-reviewed papers in pure and applied mathematics, with the aim of using mathematical approaches to solve problems in physics, chemistry, biology, statistics, finance, computer science, engineering, and sociology, among others.
About the Research
Space travel is the best example of new quality productive forces in tourism, with its expensive and unique pricing behavior corresponding to the spacetime tensor of general relativity. Using the equation in the economic field, a model for spacetime pricing is generated by mathematical inference to study space economic behaviors.
The research is built upon the Walrasian equilibrium economic model to infer the space travel pricing process from the mathematical models of general relativity, the accounting equation, and economic supply and demand functions. In the study, the Cobb–Douglas functions embed the endogenous factors—space and space technology—as new capital to form the production function of space travel firms. The same functions are used to transform consumption variables into space consumption utility functions and to achieve general equilibrium through supply and demand. The methodology of econophysics and analogy is used to derive the space travel pricing model through profit maximization and envy-free pricing models in unit-demand markets.
Research Discussion
On the supply side, while Juárez (2015) demonstrated the inequality of the accounting equation using a mathematical axiomatic set theory, this study gives financial meaning through the space travel pricing process, explaining that the short-term accounting equation inequality of space travel suppliers arises from a short-term equity premium effect. However, in the long term, the closing accounts process of the accounting cycle will complete the accounting equation with net profit in the form of incremental equity. On the demand side, space travel consumption can be assumed to be a value at risk (VaR) investment, which is to achieve space travel with a specific spacetime curvature through investment-oriented consumption. The discussion shows that even with the spacetime tensor, the market can still achieve general equilibrium in the dynamic adjustment process of supply and demand.
Research Contribution
To empirically verify mathematical models and algorithms, this study employs a simulation analysis on the case of Virgin Galactic. The results show that space travel pricing conforms to the principle of market equilibrium, but needs to be extended to the spacetime tensor of general relativity. The conclusion of the study demonstrates the equivalence between supply and demand functions, which corresponds to the equivalence between the spatial geometric tensor and the energy–momentum tensor in general relativity. The spacetime tensor explains the principles of gravity and the motion of space matter, and reflects the supply–demand equilibrium and pricing behavior in the market.
Read the full paper:
https://doi.org/10.3390/math12050757
Source: Research Management Office
