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# Pair production with electron capture in peripheral collisions of relativistic heavy ions

## I Introduction

Peripheral collisions with relativistic heavy ions are a source of several interesting physical processes and have attracted a great number of theoretical and experimental work (see, e.g., , and references therein). One of the processes of interest is pair production by the strong electromagnetic field of large Z nuclei in relativistic heavy ion colliders. In the case of production of free pairs the theoretical interest resides in the non-perturbative character of the process. Different techniques have been used to study this problem theoretically, but we will not discuss them here. Another case of general interest is the production of pairs in which the electron is captured in a bound state of one of the colliding nuclei  (see also ref.  and references therein). The interest here arises from its consequence for luminosity changing of the relativistic ion beams in colliders like RHIC (Relativistic Heavy Ion Collider) at Brookhaven, and the LHC (Large Hadron Collider) at CERN (for a recent analysis, see ). A more striking application of this process was the recent production of antihydrogen atoms using relativistic antiproton beams . In that case the positron is produced and captured in an orbit of an antiproton.

Early calculations of pair production with capture used perturbation theory , the only difference being the way the distortion effects for the positron wavefunction were taken into account. Evidently the calculation is best performed using the frame of reference of the nucleus where the electron is captured. Many other calculations have been performed . Some of them used non-perturbative approaches, e.g., coupled-channels calculations. However, in contrast to the production of free pairs, pair-production with atomic capture of the electron is well described in perturbation theory. The large coupling constant for large nuclei ($`Z\alpha 1`$) does not matter here, since the scaled matrix element divided by $`Z\alpha `$, i.e. $`M/(Z\alpha )`$, is much smaller in this case than it is for the production of free pairs. In other words, the overlap between the positron and the electron wavefunctions is much less than that for the production of free pairs. The first terms of the perturbation series are small enough to neglect the inclusion of higher order terms . Indeed it was explicitly shown in ref.  that non-perturbative calculations modify the cross sections at most by 1%.

The theoretical difficulty here is to properly account for the distortion of the positron wavefunction in the field of the nucleus where the electron is captured. In this article we study this property more closely, and compare our results with the calculations of ref. , which were based on the Sommerfeld-Maue wavefunctions for the positron . We also investigate the accuracy and limitations of the equivalent photon approximation (EPA), what will gives us a clear understanding of the effects of distortion. We have closely used the technique of ref.  for the study of anti-hydrogen production cross sections at LEAR/CERN. We show that a commonly used approximation obtained in ref.  yields results up to a factor 5 too small for large ion charges.

In section 2 we deduce the cross sections for pair production with K-shell capture and obtain the cross sections in terms of longitudinal and transverse components. In section 3 we compare the calculation with that of pair production with capture by real photons. This allows us to disclose the role of distortion effects. We also show that the transverse part of the virtual photon cross section is much larger than the longitudinal one. In section 4 we calculate total cross sections and compare them to the results obtained in ref. , to the equivalent photon approximation and to recent experimental data . Our conclusions are given in section 5.

## II Pair Production with K-shell capture

In the semiclassical approach we assume that the relativistic ions move along straight lines. Although the laboratory system is a more symmetric frame of reference, the calculation is best accomplished in the frame of reference of one of the ions - the one in which the electron is captured. The reason is that the effects of distortion of the positron wavefucntion are very important, and cannot be neglected. This distortion effect is most naturally taken into account in the rest frame of the nucleus.

The relationship between the Lorentz contraction factor associated with the relative velocity between the colliding nuclei, $`\gamma `$, and the collider energy per nucleon in GeV , $`E/A`$, is given by $`\gamma =2(1.0735\times E/A)^2`$, for $`E/A1.`$ For example, at the RHIC, $`E/A=100`$, and $`\gamma =2.3\times 10^4`$, while at the LHC, $`E/A=3\times 10^3`$, and $`\gamma 2.07\times 10^7`$. According to refs. the probability amplitude for pair production with capture for a collision with impact parameter $`𝐛`$ is given by

$$a_{1st}=\frac{Ze}{i\pi }d^2q_t\frac{e^{i𝐪_t.𝐛}}{q_t^2+\left(\omega /\mathrm{v}\gamma \right)^2}F(𝐐),$$
(1)
where $`𝐪_t`$ is a transverse momentum vector with two components, $`𝐐(𝐪_t,\omega /\mathrm{v})`$ is a 3-component momentum vector with the third component equal to $`\omega /\mathrm{v},`$and $`\omega `$ is the total energy used in the pair production. It is important to keep the relative velocity between the colliding nuclei, $`\mathrm{v}`$, in the right places for the moment (although $`\mathrm{v}c=1`$) , since important combinations of 1 and $`\mathrm{v}`$ will lead to Lorentz factors $`\gamma =\left(1\mathrm{v}^2\right)^{1/2}`$ in subsequent steps of the calculation. In the case of K-shell capture $`\omega =\epsilon +mI_K`$, $`I_K`$ is the ionization energy of the K-shell electron, and $`\epsilon `$ is the positron total energy $`\epsilon =\sqrt{p^2+1}`$ (from now on we will use natural units, so that $`\mathrm{}=c=m=1`$). The form factor $`F(𝐐)`$ is given in terms of the lepton transition current $`j_\mu (r)=e\overline{\mathrm{\Psi }^{(+)}}\gamma _\mu \mathrm{\Psi }^{()}`$ as

$$F(𝐐)=ieK_\mu d^3r\overline{\mathrm{\Psi }^{(+)}}(𝐫)e^{i𝐐.𝐫}\gamma _\mu \mathrm{\Psi }^{()}(𝐫),$$
(2)
where $`K_\mu (0,𝐊)`$, with $`𝐊=(𝐪_t/\omega ,1/\mathrm{v}\gamma ^2)`$. For details of derivation of eqs. (1-2), see refs. . The cross section is obtained by integrating the square of the expression (1) over all possible impact parameters:

$$\sigma =\underset{spins}{}\left|a_{1st}\right|^2d^2b=4Z^2e^2\underset{spins}{}d^2q_t\frac{\left|F(𝐐)\right|^2}{(𝐐^2\omega ^2)^2}.$$
(3)
For the positron wavefunction we use a plane wave and a correction term to account for the distortion due to the nucleus charge. The correction term is considered to be proportional to $`Ze^2`$. The wavefunction is then given by

$$\mathrm{\Psi }^{(+)}=N_+\left[\mathrm{v}e^{i𝐩.𝐫}+\mathrm{\Psi }^{}\right],$$
(4)
where $`N_+`$ is a normalization constant.

Only the Fourier transform of $`\mathrm{\Psi }^{}`$ will enter the calculation. This Fourier transform can be deduced directly from the Dirac equation for the positron in the presence of a Coulomb field of a nucleus:

$$(\gamma ^0\epsilon +i\stackrel{}{\gamma }.\stackrel{}{}+m)\mathrm{\Psi }^{}=\frac{Ze^2}{r}\gamma ^0\mathrm{v}e^{i𝐩.𝐫},$$
(5)
Applying on both sides of this equation the operator $`\left(\gamma ^0\epsilon +i\stackrel{}{\gamma }.\stackrel{}{}m\right)`$ we get

$$(\mathrm{\Delta }+𝐩^2)\mathrm{\Psi }^{}=Ze^2(\gamma ^0\epsilon +i\stackrel{}{\gamma }.\stackrel{}{}m)(\gamma ^0\mathrm{v})\frac{e^{i𝐩.𝐫}}{r}.$$
(6)
Multiplying by $`e^{i𝐪.𝐫}`$and integrating over $`d^3r`$ we get

$$(𝐩^2𝐪^2)\mathrm{\Psi }_𝐪^{}=Ze^2[2\gamma ^0\epsilon \stackrel{}{\gamma }.(𝐪𝐩)](\gamma ^0\mathrm{v})\frac{4\pi }{(𝐪𝐩)^2},$$
(7)
where we have used the identity $`\gamma ^0(\gamma ^0\epsilon i\stackrel{}{\gamma }.\stackrel{}{}+m)(\gamma ^0\mathrm{v})=0.`$ Thus,

$$\overline{\mathrm{\Psi }_𝐪^{}}\left(\mathrm{\Psi }_𝐪^{}\right)^{}\gamma ^0=4\pi Ze^2\overline{\mathrm{v}}\frac{2\gamma ^0\epsilon +\stackrel{}{\gamma }.(𝐪𝐩)}{(𝐪𝐩)^2(𝐪^2𝐩^2)}\gamma ^0.$$
(8)
We will need this result later to calculate $`F(𝐐)`$. The normalization constant $`N_+,`$ which accounts for the distortion of the wavefunction to all orders is given by

$$N_+=\mathrm{exp}\left[\pi a_+/2\right]\mathrm{\Gamma }\left(1+ia_+\right),a_+=Ze^2/\mathrm{v}_+,$$
(9)
where $`\mathrm{v}_+`$ is the positron velocity in the frame of reference of the nucleus where the electron is capture.

For the electron we use the distorted wavefunction described in ref. , i.e.,

$$\mathrm{\Psi }^{()}=[1\frac{i}{2}\gamma ^0\stackrel{}{\gamma }.\stackrel{}{}]\mathrm{u}\mathrm{\Psi }_{nonr},\mathrm{where}\mathrm{\Psi }_{nonr}=\frac{1}{\sqrt{\pi }}\left(\frac{Z}{a_H}\right)^{3/2}\mathrm{exp}(Zr/a_H),$$
(10)
with $`a_H=1/e^2`$ being the hydrogen Bohr radius.

Using the positron and the electron wavefunctions as given by eqs. (4) and (10), we get

$`F(𝐐)`$ $`=`$ $`ieN_+{\displaystyle d^3r\left\{\overline{\mathrm{v}}e^{i𝐩.𝐫}+\overline{\mathrm{\Psi }^{}}\right\}\left(\gamma _\mu K^\mu \right)e^{i𝐐.𝐫}}`$ (11)
$`\times `$ $`\{1{\displaystyle \frac{i}{2m}}\gamma ^0\stackrel{}{\gamma }.\stackrel{}{}\}\mathrm{u}\mathrm{\Psi }_{nonr}(𝐫)`$ (12)
$``$ $`ieN_+{\displaystyle }d^3r\{\overline{\mathrm{v}}e^{i(𝐐𝐩).𝐫}\left(\gamma _\mu K^\mu \right)\left[(1{\displaystyle \frac{i}{2m}}\gamma ^0\stackrel{}{\gamma }.\stackrel{}{})\right]\mathrm{u}\mathrm{\Psi }_{nonr}(𝐫)`$ (13)
$`+`$ $`\overline{\mathrm{\Psi }^{}}e^{i𝐐.𝐫}\left(\gamma _\mu K^\mu \right)\mathrm{u}\mathrm{\Psi }_{nonr}(𝐫)\},`$ (14)
where in the last equation we neglected terms of highest orders in $`Z\alpha .`$

Integrating by parts yields

$$F(𝐐)ieN_+\{\overline{\mathrm{v}}\left(\gamma _\mu K^\mu \right)\left[(1+\frac{1}{2m}\gamma ^0\stackrel{}{\gamma }.(𝐐𝐩))\mathrm{u}\left(\mathrm{\Psi }_{nonr}\right)_{𝐐𝐩}\right]+\overline{\mathrm{\Psi }_𝐐^{}}\left(\gamma _\mu K^\mu \right)\mathrm{u}\frac{1}{\sqrt{\pi }}\left(\frac{Z}{a_H}\right)^{3/2}\}.$$
(15)
Since the corrections are to first order in $`Z\alpha `$, we have replaced $`\mathrm{\Psi }_{nonr}(𝐫)`$ by its constant value $`\left(Z/a_H\right)^{3/2}\left(1/\sqrt{\pi }\right)`$ in the last term of eq. (15). If we would do the same in the first term it would be identically zero (except for $`𝐐=𝐩`$). We need to keep the corrections in the wavefunctions at least to first order in $`Z\alpha `$; for $`\epsilon 1`$ these corrections yield a term of the same order as the plane-wave to the total cross section, as we shall see later.

Inserting these results in eq. 3, and using $`\left[\mathrm{exp}\left(r/a\right)\right]_{𝐐𝐩}=8\pi /a\left(𝐐𝐩\right)^4`$, we get,

$$F(𝐐)=ieN_+\mathrm{\hspace{0.33em}8}\sqrt{\pi }\left(\frac{Z}{a_H}\right)^{5/2}\frac{\mathrm{v}A\mathrm{u}}{\left(𝐐𝐩\right)^2},$$
(16)
where

$$A=a(\gamma _\mu K^\mu )+(\gamma _\mu K^\mu )\gamma ^0(\stackrel{}{\gamma }.𝐛)+(\stackrel{}{\gamma }.𝐝)\gamma ^0(\gamma _\mu K^\mu ),$$
(17)
with

$`a`$ $`=`$ $`{\displaystyle \frac{1}{\left(𝐐𝐩\right)^2}}{\displaystyle \frac{\epsilon }{𝐐^2𝐩^2}},𝐛={\displaystyle \frac{𝐐𝐩}{2\left(𝐐𝐩\right)^2}},\mathrm{and}`$ (18)
$`𝐝`$ $`=`$ $`{\displaystyle \frac{𝐐𝐩}{2(𝐐^2𝐩^2)}}.`$ (19)
Inserting (16) into (3), with $`\left|N_+\right|^2=2\pi a_+/\left[\mathrm{exp}\left(2\pi a_+\right)1\right]`$, performing the sum over spins with standard trace techniques, and using $`p^2dp=\epsilon pd\epsilon `$ ($`p\left|𝐩\right|`$), we get

$`{\displaystyle \frac{d\sigma }{d\epsilon d\mathrm{\Omega }}}`$ $`=`$ $`{\displaystyle \frac{64}{\pi a_H^5\mathrm{v}_+}}{\displaystyle \frac{Z^8e^6p}{\left[\mathrm{exp}\left(2\pi Ze^2/\mathrm{v}_+\right)1\right]}}{\displaystyle \frac{d^2q_t}{(𝐐^2\omega ^2)^2}\frac{1}{\left(𝐐𝐩\right)^4}}`$ (20)
$`\times `$ $`\{(\epsilon 1)[(𝐛𝐝)^2K^2+4(𝐊.𝐛)(𝐊.𝐝)]`$ (21)
$`+`$ $`(\epsilon +1)a^2K^22a[2(𝐩.𝐊)(𝐛.𝐊)+𝐩.(𝐛𝐝)K^2]\}.`$ (22)
In this relation we have used $`\epsilon _{}1`$, neglecting the electronic binding energy in the numerator of the expression inside the integral.

Using the definition of $`K_\mu `$, it is illustrative to separate the integrand of the above equation in terms of longitudinal and transverse components:

$$\frac{d\sigma }{d\epsilon d\mathrm{\Omega }}=\frac{1}{\pi \omega }Z^2e^2_0^{\mathrm{}}d(q_t^2)\frac{q_t^2}{(𝐐^2\omega ^2)^2}\left[\frac{d\sigma _{\gamma ^{}T}}{d\mathrm{\Omega }}(𝐐,\omega )+\frac{d\sigma _{\gamma ^{}L}}{d\mathrm{\Omega }}(𝐐,\omega )+\frac{d\sigma _{\gamma ^{}LT}}{d\mathrm{\Omega }}(𝐐,\omega )\right],$$
(23)
where

$`{\displaystyle \frac{d\sigma _{\gamma ^{}T}}{d\mathrm{\Omega }}}(𝐐,\omega )`$ $`=`$ $`{\displaystyle \frac{64\pi p}{a_H^5\omega \mathrm{v}_+}}{\displaystyle \frac{Z^6e^4}{\left[\mathrm{exp}\left(2\pi Ze^2/\mathrm{v}_+\right)1\right]}}{\displaystyle \frac{1}{\left(𝐐𝐩\right)^4}}\{(\epsilon 1)[(𝐛𝐝)^2{\displaystyle \frac{(q_t𝐩.\widehat{𝐞}_t)^2}{\left(𝐐𝐩\right)^2\left(𝐐^2𝐩^2\right)}}]`$ (24)
$`+`$ $`(\epsilon +1)a^2+2a[{\displaystyle \frac{(q_t𝐩.\widehat{𝐞}_t)𝐩.\widehat{𝐞}_t}{\left(𝐐𝐩\right)^2}}𝐩.(𝐛𝐝)]\},`$ (25)
$`{\displaystyle \frac{d\sigma _{\gamma ^{}L}}{d\mathrm{\Omega }}}(𝐐,\omega )`$ $`=`$ $`{\displaystyle \frac{64\pi p\omega }{a_H^5q_t^2\gamma ^4\mathrm{v}_+}}{\displaystyle \frac{Z^6e^4}{\left[\mathrm{exp}\left(2\pi Ze^2/\mathrm{v}_+\right)1\right]}}{\displaystyle \frac{1}{\left(𝐐𝐩\right)^4}}\{(\epsilon 1)[(𝐛𝐝)^2{\displaystyle \frac{\left(\omega /\mathrm{v}p_z\right)^2}{\left(𝐐𝐩\right)^2\left(𝐐^2𝐩^2\right)}}]`$ (26)
$`+`$ $`(\epsilon +1)a^2+2a[{\displaystyle \frac{p_z\left(\omega /\mathrm{v}p_z\right)}{\left(𝐐𝐩\right)^2}}𝐩.(𝐛𝐝)]\},`$ (27)
$`{\displaystyle \frac{d\sigma _{\gamma ^{}LT}}{d\mathrm{\Omega }}}(𝐐,\omega )`$ $`=`$ $`{\displaystyle \frac{128\pi p}{a_H^5q_t\gamma ^2\mathrm{v}_+}}{\displaystyle \frac{Z^6e^4}{\left[\mathrm{exp}\left(2\pi Ze^2/\mathrm{v}_+\right)1\right]}}{\displaystyle \frac{\left(\omega /\mathrm{v}p_z\right)}{\left(𝐐𝐩\right)^6}}`$ (29)
$`\times \{a[(𝐩.\widehat{𝐞}_t)+p_z{\displaystyle \frac{\left(q_t𝐩.\widehat{𝐞}_t\right)}{\left(\omega /\mathrm{v}p_z\right)}}](\epsilon 1){\displaystyle \frac{\left(q_t𝐩.\widehat{𝐞}_t\right)}{\left(𝐐^2𝐩^2\right)}}\},`$
In these equations $`\widehat{𝐞}=\widehat{𝐪}_t/q_t`$ is a unit vector in the transverse direction. The cross sections $`\sigma _{\gamma ^{}T}`$, $`\sigma _{\gamma ^{}L}`$, and $`\sigma _{\gamma ^{}LT}`$ are interpreted as the cross sections for pair production with capture by virtual transverse and longitudinal photons and a interference term, respectively. Note that the transverse and longitudinal directions are with respect to the beam axis, not with respect to the photon momentum, as is usually meant by this term. Only for $`\gamma 1`$, this definition agrees with the definition of transverse and longitudinal virtual photons. However, this separation is very useful, as we will see next.

Now we turn to the relation to pair-production by real photons and the relation to the equivalent photon approximation.

## III Pair production with capture by real photons: role of distortion effects

The cross section for pair production with capture real photons is given by

$$d\sigma _\gamma =2\pi \left|V_{fi}\right|^2\delta (\omega \epsilon 1)\frac{d^3p}{\left(2\pi \right)^3},$$
(30)
where

$$V_{fi}=e\sqrt{\frac{4\pi }{\omega }}d^3r\overline{\mathrm{\Psi }^{(+)}}(𝐫)e^{i\stackrel{}{\kappa }.𝐫}(\widehat{𝐞}.\stackrel{}{\gamma })\mathrm{\Psi }^{()}(𝐫),$$
(31)
with $`\stackrel{}{\kappa }=\widehat{𝐳}\omega `$, where $`\widehat{𝐳}`$ is the unit vector along the photon incident direction, and $`\widehat{𝐞}`$ is photon polarization unit vector.

Using the positron and the electron wavefunctions from the previous section, and performing similar steps, we get

$$V_{fi}=eZ^{5/2}\frac{8\pi \sqrt{2}}{a_H^{5/2}\omega ^{1/2}}N_+\frac{\mathrm{v}Bu}{\left(\stackrel{}{\kappa }𝐩\right)^2},$$
(32)
where

$$B=a_\kappa (\stackrel{}{\gamma }.\stackrel{}{\kappa })+(\stackrel{}{\gamma }.\stackrel{}{\kappa })\gamma ^0(\stackrel{}{\gamma }.𝐛_\kappa )+(\stackrel{}{\gamma }.𝐝_\kappa )\gamma ^0(\stackrel{}{\gamma }.\stackrel{}{\kappa }).$$
(33)
where $`a_\kappa `$, $`𝐛_\kappa `$, and $`𝐝_\kappa `$ are the quantities defined in eqs. 19, but with $`𝐐`$ replaced by $`\stackrel{}{\kappa }=\widehat{𝐳}\omega `$. Inserting these results in eq. 30 and summing over spins we get

$`{\displaystyle \frac{d\sigma _\gamma }{d\mathrm{\Omega }}}\left(\omega \right)`$ $`=`$ $`{\displaystyle \frac{64\pi e^2p}{a_H^5\omega \mathrm{v}_+}}{\displaystyle \frac{Z^6e^2}{\left[\mathrm{exp}\left(2\pi Ze^2/\mathrm{v}_+\right)1\right]}}{\displaystyle \frac{1}{\left(\stackrel{}{\kappa }𝐩\right)^4}}`$ (34)
$`\times `$ $`\{(\epsilon 1)[(𝐛_\kappa 𝐝_\kappa )^2{\displaystyle \frac{(𝐩.\widehat{𝐞})^2}{\left(\stackrel{}{\kappa }𝐩\right)^2\left(\kappa ^2p^2\right)}}]`$ (35)
$`+`$ $`(\epsilon +1)a_\kappa ^2+2a_\kappa [{\displaystyle \frac{(𝐩.\widehat{𝐞})^2}{\left(\stackrel{}{\kappa }𝐩\right)^2}}𝐩.(𝐛_\kappa 𝐝_\kappa )]\}.`$ (36)
We notice that the above equation can also be obtained from eq. 24 in the limit $`q_t0`$ and $`\mathrm{v}c`$. In this limit $`\sigma _{\gamma ^{}L}0`$, and $`\sigma _{\gamma ^{}LT}0`$, and $`\sigma _{\gamma ^{}T}`$ becomes the cross section for the production of pairs, with capture, by real photons.

Integrating eq. 36 over the azimuthal angle we get (without any further approximations!)

$$\frac{d\sigma _\gamma }{d\theta }\left(\omega \right)=4\pi ^2\frac{Z^6e^2}{\left[\mathrm{exp}\left(2\pi Ze^2/\mathrm{v}_+\right)1\right]}\frac{e^2p^3\left(\epsilon +2\right)}{a_H^5\omega ^4\mathrm{v}_+}\frac{\mathrm{sin}^3\theta }{\left(\epsilon p\mathrm{cos}\theta \right)^4}\left[\epsilon p\mathrm{cos}\theta \frac{2}{\omega (\epsilon +2)}\right]$$
(37)
In the frame of reference of the nucleus, the angular distribution of the positrons is forward peaked, along the incidence of the photon. The higher the positron energy is, the more forward peaked the distribution becomes. In a collider, a Lorentz transformation of these results to the laboratory frame implies that all positrons are seen along the beam direction, within an opening angle of order of $`1/\gamma 1`$.

Integrating eq. 37 over $`\theta `$ we get

$$\sigma _\gamma =\frac{8\pi ^2e^2}{a_H^5\mathrm{v}_+}\frac{Z^6e^2}{\left[\mathrm{exp}\left(2\pi Ze^2/\mathrm{v}_+\right)1\right]}\frac{p}{\omega ^4}\left[\epsilon ^2+\frac{2}{3}\epsilon +\frac{4}{3}\frac{\epsilon +2}{p}\mathrm{ln}\left(\epsilon +p\right)\right]$$
(38)
The relevance of the Coulomb distortion corrections can be better understood by using the high energy limit, $`\epsilon 1.`$ From eq. (38) we get

$$\sigma _\gamma =\frac{8\pi ^2e^2}{a_H^5\mathrm{v}_+}\frac{Z^6e^2}{\left[\mathrm{exp}\left(2\pi Ze^2/\mathrm{v}_+\right)1\right]}\frac{1}{\epsilon }$$
(39)
If we had used plane-waves for the electron and hydrogenic wave function for the positron in our calculation, without the corrections to order $`Z\alpha `$, the cross section for the pair production with capture by real photons would be given by

$$\left[\frac{d\sigma _\gamma }{d\theta }\left(\omega \right)\right]_{PWA}=4\pi \frac{Z^5e^2p}{a_H^5\omega ^4}\frac{\mathrm{sin}\theta }{\left(\epsilon p\mathrm{cos}\theta \right)^4},$$
(40)
the integral of which being

$$\left[\sigma _\gamma \right]_{PWA}=\frac{8\pi Z^5e^2}{a_H^5}\frac{p}{\omega ^4}\left(3\epsilon ^2+p^2\right).$$
(41)
In the high energy limit:

$$\left[\sigma _\gamma \right]_{PWA}=\frac{32\pi Z^5e^2}{3a_H^5}\frac{1}{\epsilon }$$
(42)
Using the approximation $`Z\alpha 1`$ in eq. (39) we get

$$\sigma _\gamma =\frac{4\pi Z^5e^2}{a_H^5}\frac{1}{\epsilon }$$
(43)
which is different than eq. (42) by a factor 8/3. This is important to show how the corrections of order $`Z\alpha `$ influence the result of the calculation. Not only they modify the results by inclusion of the correct normalization of the distorted positron wavefunction, $`N_+`$, but they also yield terms to the matrix elements for photo-production of the same magnitude as the terms of lowest order. The origin of the difference between the two results are the small distances which enter in the calculation of the matrix elements of eq. (31). These corrections are essential to account for their effects properly, and are enough to account for a good description of pair production with capture, as we will see in the next section. It is worhtwhile to mention that this equation confirms the findings of Sauter  for the annihilation of a positron with an electron in the K-shell of an atom. Using the detailed balance theorem that process can be related to the gamma production of electron-positron pairs with electron capture and the above equation is reproduced.

All positron variables in the above equations are expressed in the frame of reference of the ion where the electron is captured. Now the $`(𝐐^2\omega ^2)^2`$ denominator of the first term inside the integral 23 shows that $`q_t\omega /\mathrm{v}\gamma `$ is the relevant order of magnitude of $`q_t`$ in the integration. Thus, in all three virtual photon cross sections, 24, 27, and 29 we have $`\left|𝐐\right|\omega /\mathrm{v}\omega \omega /\mathrm{v}\gamma `$. The additional terms seem also to be independent from $`\gamma `$, what would imply that no extra $`\gamma `$ factor arise in these expressions. Thus, for large $`\gamma `$, $`\sigma _{\gamma ^{}T}\gamma ^2\sigma _{\gamma ^{}L}\gamma \sigma _{\gamma ^{}LT}`$. This is confirmed by numerical calculations. Thus, for RHIC and LHC energies we can safely use

$$\frac{d\sigma }{d\epsilon d\mathrm{\Omega }}=\frac{1}{\pi \omega }Z^2e^2_0^{\mathrm{}}d(q_t^2)\frac{q_t^2}{(𝐐^2\omega ^2)^2}\left[\frac{d\sigma _{\gamma ^{}T}}{d\mathrm{\Omega }}(𝐐,\omega )\right].$$
(44)
The above discussion might seem convincing. But, it is still reasonable to check this result within a solvable model. This can be achieved by using plane-waves for the positron and hydrogenic waves for the electron, without the correction terms to order $`Z\alpha .`$ In this case, we get

$$F(𝐐)=4ie\sqrt{\pi }\left(Z/a_H\right)^{5/2}\frac{\overline{\mathrm{v}}(\stackrel{}{\gamma }.𝐊)\mathrm{u}}{\left(𝐐𝐩\right)^2},$$
(45)
which yields the cross section

$$\frac{d\sigma }{d\epsilon d\mathrm{\Omega }}=\frac{1}{\pi \omega }Z^2e^2_0^{\mathrm{}}d(q_t^2)\frac{q_t^2}{(𝐐^2\omega ^2)^2}\left[\frac{d\sigma _{\gamma ^{}T}}{d\mathrm{\Omega }}(𝐐,\omega )+\frac{d\sigma _{\gamma ^{}L}}{d\mathrm{\Omega }}(𝐐,\omega )\right],$$
(46)
where the interference term is exactly zero, and

$$\frac{d\sigma _{\gamma ^{}T}}{d\mathrm{\Omega }}(𝐐,\omega )=\frac{32Z^5e^2p}{a_H^5}\frac{1}{\left(𝐐𝐩\right)^8},\mathrm{and}\frac{d\sigma _{\gamma ^{}L}}{d\mathrm{\Omega }}(𝐐,\omega )=\frac{32Z^5e^2p\omega ^2}{a_H^5q_t^2}\left(\frac{1}{\gamma ^2\mathrm{v}}\right)^2\frac{1}{\left(𝐐𝐩\right)^8}.$$
(47)
The integral over $`\mathrm{\Omega }`$ in the expressions above can be done analytically yielding

$$\left\{\begin{array}{c}\sigma _{\gamma ^{}T}(Q,\omega )\hfill \\ \sigma _{\gamma ^{}L}(Q,\omega )\hfill \end{array}\right\}=\frac{128\pi Z^5e^2p}{3a_H^5}\frac{\left(𝐩^2+3𝐐^2\right)\left(3𝐩^2+𝐐^2\right)}{\left(𝐐^2𝐩^2\right)^6}\left\{\begin{array}{c}1\hfill \\ \omega ^2/(q_t\gamma ^2\mathrm{v})^2\hfill \end{array}\right\}.$$
(48)
Using this result, the integral over $`q_t^2`$ in (46) can also be performed analytically but resulting in too long expressions to be transcribed here. We also note that the denominator $`\left(𝐐𝐩\right)^2`$ in eq. (16) implies that $`\left|𝐩\right|\left|𝐐\right|\omega /\mathrm{v}`$ and that the largest contribution to the integrals arise from the region with $`\left(𝐐𝐩\right)^2`$ $`\omega ^2/\gamma ^2`$. Thus, in the plane wave approximation we really expect that $`\sigma _{\gamma ^{}T}`$ is by some power of $`\gamma `$ larger than the $`\sigma _{\gamma ^{}L}`$ cross section.

## IV  Total cross sections: comparison with the equivalent photon approximation

The energy spectrum of the positrons can be obtained by integrating 44 over angles. The calculation can be done analytically if one neglects terms of order $`𝒪\left(1/\gamma \right)`$. The expressions obtained were checked against the numerical results and we found that for RHIC energies the difference between the two results are only visible (of order of 1%) for positron energies $`\epsilon 1`$. For positron energies $`\epsilon 1`$ the differences are imperceptible. One gets

$$\frac{d\sigma }{d\epsilon }=\frac{32\pi p}{a_H^5\omega \mathrm{v}_+}\frac{Z^8e^6}{\left[\mathrm{exp}\left(2\pi Ze^2/\mathrm{v}_+\right)1\right]}\left\{\frac{CD}{B^6}\left[\mathrm{ln}\left(\frac{B}{A}\right)\frac{197}{60}\right]+\frac{3}{5}\frac{D}{B^5}+\frac{1}{5}\frac{C}{B^5}+\frac{3}{20}\frac{1}{B^4}\right\},$$
(49)
where

$$A=\frac{\omega ^2}{\gamma ^2},B=\omega ^2p^2,C=3\omega ^2+p^2,\mathrm{and}D=3p^2+\omega ^2.$$
(50)
In ref.  analytical formulas were also derived for the differential and total cross section of pair production with K-shell electron capture. The cross sections were obtained by using Sommerfeld-Maue wave functions for the positron. Their result is

$$\frac{d\sigma }{dϵ}=\frac{16\pi p}{a_H^5\omega ^5\mathrm{v}_+}\frac{Z^8e^6}{\left[\mathrm{exp}\left(2\pi Ze^2/\mathrm{v}_+\right)1\right]}\left[\frac{4}{3}+\frac{2\epsilon }{3}+\epsilon ^2\frac{\epsilon 2}{p}\mathrm{ln}\left(\epsilon +p\right)\right]\mathrm{ln}\left(\frac{\gamma \delta }{\omega }\right),$$
(51)
where $`\delta =0.68108\mathrm{}`$ is related to the Euler’s number.

It is also worthwhile to compare the calculations with the equivalent photon approximation. The function

$$n(\gamma ,Q)=\frac{1}{\pi }Z^2e^2\frac{q_t^2}{\left[q_t^2+\left(\omega /\gamma \mathrm{v}\right)^2\right]^2}$$
(52)
is called by “equivalent photon number”, and is strongly peaked at $`q_t\omega /\gamma \mathrm{v}`$, which is very small for $`\gamma 1`$. The equivalent photon approximation states that

$$\frac{d\sigma }{d\epsilon }_0^{q_t^{\mathrm{max}}}d\left(q_t^2\right)\frac{1}{\omega }n(\gamma ,Q)\sigma _{\gamma ^{}T}\left(q_t=0,\omega \right)=\frac{1}{\omega }\sigma _\gamma \left(\omega \right)_0^{q_t^{\mathrm{max}}}d\left(q_t^2\right)n(\gamma ,Q)$$
(53)
where in the last equality one approximates $`\sigma _{\gamma ^{}T}\left(q_t=0,\omega \right)\sigma _\gamma \left(\omega \right).`$ The problem with the approximation is that the integral in eq. 53 diverges logarithmically. The approximation is only valid if we include a cutoff parameter $`q_t^{\mathrm{max}}`$, determined by the value of $`q_t`$ at which $`\sigma _{\gamma ^{}T}(Q,\omega )`$ drops to zero. For RHIC and LHC energies, we verified that the transverse virtual photon cross section drops to zero at $`q_t\epsilon .`$ Another hint for obtaining the appropriate cutoff value of $`q_t`$ is given in figure 2 where we plot the energy spectrum of the positron, $`d\sigma /d\epsilon `$, for RHIC energies. We observe that the energy spectrum peaks at $`\epsilon 23`$. We thus conclude that an appropriate value of the cutoff parameter is $`q_t^{\mathrm{max}}1`$. Inserting this value in eq. 53 we get the same result as 51, except that in the last logarithm of that formula $`\delta `$ is replaced by $`0.6065\mathrm{}`$, an irrelevant change, in view of the large value of $`\gamma `$.

In figure 2 we compare our result, eq. 49 (solid line) with the approximation 51 (dashed line). We observe a good agreement, except at the low positron energies. This is an important result. The Sommerfeld-Maue wave functions (see  for a complete discussion about these wavefunctions) reproduce the exact Coulomb-Dirac wavefunction in the region relevant for the pair-production process. They account for the distortion effects in all orders. The result of figure 2 shows that, for pair production with K-shell capture, the approximation 4, with 8, leads to very close agreement with that using Sommerfeld-Maue wavefunctions. That is, the most important part of the distortion is already taken into account by expanding the wavefunction to first-order in $`Z\alpha `$ and by using the correct normalization for the distorted wave 9. We also note from figure 2 that the two results agree at large positron energies, $`\epsilon 1.`$ That is expected, since distortion effects are not important at these energies and the outgoing positron is well described by plane-waves.

The total cross section can be obtained from eqs 49 and 51 by an integration over the positron energy. The integrations are performed numerically. In ref.  an approximate analytical result was obtained. Their result is

$$\sigma =\frac{33\pi }{10a_H^5}Z^8e^6\frac{1}{\mathrm{exp}\{2\pi Ze^2\}1}\left[\mathrm{ln}\left(\gamma \delta /2\right)5/3\right].$$
(54)
The term $`\left[\right]^1`$ is the main efffect of the distortion of the positron wavefunction. It arises through the normalization of the continuum wavefunctions which accounts for the reduction of the magnitude of the positron wavefunction near the nucleus where the electron is localized (bound). Thus, the greater the $`Z`$, the less these wavefunctions overlap.

In figure 3 we compare the three results for RHIC energies, as a function of the atomic charge $`Z`$. The numerical integration of eqs. 49 and 51 yields essentially the same result, differing at most within 2% from each other. They are displayed by the solid curve. The dashed curve is the result of 54. It agrees with the integrations of eqs. 49 and 51 for low Z ($`Z15`$) but disagrees by a factor 5 for large Z ($`Z8090`$). The reason for this discrepancy is that eq. 54 was deduced in ref.  by probably neglecting the strong energy dependence (for large Z) of the exponential in the denominator of 49 which is a function of the positron velocity, $`\mathrm{v}_+`$.

We note that the cross section 49 scales approximately with $`Z^7`$ for small values of $`Z`$, as also implied by eq. 54. But, for large $`Z`$’s there is not such a simple dependence. In our case, it is directly obtained from integration of eq. 49. The charge dependence of the capture cross sections have also been studied in refs.  with slightly different results. For asymmetric systems, e.g., a projectile of charge $`Z_P`$ incident on a target of charge $`Z_{T\text{ }}`$, the equation 49 should be changed by replacing $`Z^8`$ in the numerator by $`Z_P^2Z_T^6`$ and $`Z`$ in the exponential term of the denominator by $`Z_T`$.

Equation 49 (and also 54) predicts a dependence of the cross section in the form $`\sigma =A\mathrm{ln}\gamma _c+B`$, where $`A`$ and $`B`$ are coefficients depending on the system and bombarding energy . This dependence was used in the analysis of the experiment in ref. . In recent calculations, attention was given to the correct teatment of the distortion effects in the positron wavefunction . In figure 4 we show the recent experimental data of ref.  compared to eq. 54 (dashed line) and to eq. 49. The data was obtained for $`Pb^{82+}`$ at 33 TeV impinging on several targets. The comparison with the experimental data is not fair since atomic screening was not taken into account here. When screening is present the cross sections will always be smaller at least by a factor 2-4 .

Using eq. 49 for $`Au+Au`$ beams at RHIC (100 GeV/nucleon) and $`Pb+Pb`$ beams at LHC (3 TeV/nucleon), we get $`\sigma =229`$ b and $`\sigma =562`$ b, respectively. Other results can be easily obtained from a simple integration of eq. 49. In ref.  a numerical calculation was done making use of full Dirac wavefunctions, yielding 114 b for $`Au+Au`$ beams at RHIC. This is about 2 times larger than that obtaining using eq. 54 from ref.  and about 2 times smaller than our eq. 49. We assume that the reason for these diferences are that our wavefunctions are correct only to first order in $`Z\alpha `$. It might be that the inclusion of higher-order terms will change our results. However, the nice feature of our approach is that it provides an analytical description of the process and a direct connection with the photo-production cross sections.

## V Conclusions

We have calculated the cross sections for pair production with K-shell capture in peripheral collisions of relativistic heavy ions. The cross section can be separated into longitudinal and transverse components, with respect to the beam direction. For high energies, $`\gamma 1`$, this corresponds to the usual meaning of longitudinal and transverse components of the photon. A very transparent and simple formulation is obtained using the lowest order corrections to the positron and electron wavefunctions. At ultra-relativistic energies, corresponding to the energies of relativistic heavy ion colliders (RHIC and LHC), the contribution of the longitudinal virtual photons to the total cross section vanishes. The remaining terms of the cross section can be factorized in terms of a virtual photon spectra and the cross section induced by real photons. However, the factorization depends on a cutoff parameter, which is not well defined. But, for $`\gamma 1`$ a momentum cutoff parameter $`q_t1`$ reproduces extremely well the exact value of the cross section.

We note that the electron can be captured in any atomic orbit around one of the ions, the capture to the K-shell being the largest contribution. In ref.  it was shown that the contribution of capture to all other shells will contribute by an increase of 20% of the presently calculated cross section. Depending on the relevance of this process to peripheral collisions with relativistic heavy ions and on the accuracy attained by the experiments, more theoretical studies on the capture to higher orbits should be performed. At the present stage, it is important to notice that eq. 54, from ref. , is not a good approximation for large Z ions. The calculations developed in the present article were important to pinpoint the origin of this discrepancy and the validity of the equivalent photon approximation for $`\gamma 1`$. It would be nice to show in a future study if the distortion corrections of higher order in $`Z\alpha `$ are indeed necessary to account for.

Acknowledgments

(\*) John Simon Guggenheim Fellow.

This work was partially supported by the Brazilian funding agencies CNPq, CAPES, FUJB and MCT/FINEP/CNPQ(PRONEX) under contract No. 41.96.0886.00. E-mails: bertu@if.ufrj.br, dolci@if.ufrj.br.

## VI Figure captions

1. Diagram for pair production with capture in relativistic heavy ion colliders.
2. Energy spectrum of the emitted positron in pair production with capture for 100 GeV/nucleon $`Pb+Pb`$ collisions at RHIC in the frame of reference of the nucleus where the electron is captured. The differential cross section is multiplied by the electron rest mass. The cross section is given in barns. The solid line is the exact calculation, while the dashed line is the analytical approximation, eq. 51.
3. Total cross sections for pair production at RHIC as a function of the nuclear charge of the ions. The solid line is the exact calculation, and the dashed line is obtained from eq. 54 given in ref. .
4. Cross sections for pair production with electron capture for $`Pb^{82+}`$ at 33 TeV impinging on several targets with charge $`Z`$. The recent experimental data of ref.  is compared to eq. 54 (dashed line) and to eq. 49 (solid line).


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# Economics Mapping to the Renormalization Group Scaling of Stock Markets

## I introduction

Several papers have appeared in recent years showing increasing evidence that at least some market crashes are often anticipated by a power law behaviour of the stock market index which fluctuates with oscillations that are periodic in the logarithm of the time to crash (see, for example, ). From these observations, it has been argued that there is a close relation between the stock market crashes and the renormalization group (RG) theory . Precursory logarithm- (log-)periodic patterns can also emerge from percolation models by applying the cluster concept to groups of investors acting collectively .

Though the RG approach has shown to model remarkably well the stock market time evolution and to predict the existence of a large price crash, a possible universality for the real exponents quantifying the observed behaviour in the market prices -which would allow to define a crash- has not been yet established . Unlike in the case of systems in thermodynamic equilibrium, there is no known underlying Hamiltonian from which RG critical exponents could be deduced. In this paper we propose a simplified dynamics for the price evolution and made an attempt to map this dynamics to the RG predictions. We show how the simplest, non-linear economics model proposed by the Author  may be mapped into the non-linear RG scaling of stock markets in order to understand the critical exponents in terms of relevant economics variables such as the demand and supply of a commodity (or product). As an illustrative example, we apply the mapping to the NY Standard & Poor (S&P)500 index crash of Oct. 1987.

## II Non-Linear Renormalization Group Generalization

In analogy with RG theory, it is assumed that the temporal variation of the stock market index $`I(t)`$ is related to future events at $`t^{}`$ by the transformations

$$x^{}=\varphi (x),$$
(1)
$$F(x)I(t_c)I(t)=g(x)+\frac{1}{\mu }F(\varphi (x)),$$
(2)
where $`x=t_ct`$. $`\varphi `$ is called the RG flow map and $`\mu `$ is a constant describing the scaling of $`I`$ upon the rescaling of $`t`$ in Eq.(1). $`F=0`$ at the critical point $`t_c`$ (the time of a large crash), $`g(x)`$ represents the non-singular part of the function $`F(x)`$, which is assumed to be continuous, and $`\varphi (x)`$ is assumed to be differentiable.

An extension of these results to a more general RG approach begins by considering that the solution of the RG Eq.(2), in conjunction with Eq.(1) and the linear approximation $`\varphi (x)=\widehat{\lambda }x`$, can be rewritten as

$$\frac{dF(x)}{d\mathrm{log}x}=\alpha F(x),$$
(3)
This defines limiting power laws as $`tt_c`$. Eq.(3) is then extended to include corrections to the power law with log-periodicity by introducing the amplitude $`B`$ and phase $`\psi `$ of $`F(x)=Be^{i\psi (x)}`$. The symmetry law used is the phase shift that should keep the observable constant under a change of units . This leads to postulate the following Landau expansion :

$$\frac{dF(x)}{d\mathrm{log}x}=(\alpha +i\omega )F(x)+(\eta +i\kappa )|F(x)|^2F(x)+𝒪(F^5).$$
(4)
where $`\alpha >0`$, $`\omega `$, $`\eta `$ and $`\kappa `$ are real coefficients and $`𝒪(F^5)`$ represents higher order terms to be neglected.

In terms of the amplitude and phase of $`F`$, Eq.(4) yields

$$\frac{B}{\mathrm{log}x}=\alpha B+\eta B^3+\mathrm{};\frac{\psi }{\mathrm{log}x}=\omega +\kappa B^2+\mathrm{}$$
(5)
whose solutions are found to be

$$B^2=\frac{(\frac{x}{x_0})^{2\alpha }}{1+(\frac{x}{x_0})^{2\alpha }}B_{\mathrm{}}^2,$$
(6)
$$\psi =\omega \mathrm{log}(\frac{x}{x_0})+\frac{\mathrm{\Delta }\omega }{2\alpha }\mathrm{log}(1+(\frac{x}{x_0})^{2\alpha }),$$
(7)
where $`B_{\mathrm{}}^2=\alpha /|\eta |`$, $`\mathrm{\Delta }\omega =B_{\mathrm{}}^2\kappa `$ and $`x_0`$ is an arbitrary coefficient characterizing the time scale. These general forms lead to the following solutions of the non-linear RG Eq.(4):

$`I\left(\tau \right)`$ $`=`$ $`A_1+A_2{\displaystyle \frac{\left(\tau _c\tau \right)^\alpha }{\sqrt{1+\left(\frac{\tau _c\tau }{\mathrm{\Delta }t}\right)^{2\alpha }}}}\times `$ (9)
$`[1+A_3\mathrm{cos}(\omega \mathrm{log}(\tau _c\tau )+{\displaystyle \frac{\mathrm{\Delta }\omega }{2\alpha }}\mathrm{log}(1+\left({\displaystyle \frac{\tau _c\tau }{\mathrm{\Delta }t}}\right)^{2\alpha })\left)\right],`$
where $`\tau =t/\varphi `$, $`\mathrm{\Delta }t=x_0`$ and $`A_{i=1,2,3}`$ are linear variables.

## III Non-linear Economics Model

Within our economics model , only one stock of the commodity is assumed and the market is considered competitive so it self-organizes to determine the behaviour of the asset price $`p`$. We derive a dynamical price equation which results from the prevailing market conditions in terms of the excess demand function $`E(p)=D(p)Q(p)`$, where $`D`$ and $`Q`$ are the demand and supply functions, respectively. In our description, asterisks () denote quantities in equilibrium and all variables are dimensionless.

In a competitive market the rate of price increase usually is a functional of $`E(p)`$ such that $`dp/dtf[E(p)]`$ . Considering that in general a commodity can be stored, then stocks of the commodity build up when the flow of output exceeds the flow of demand and vice-versa. The rate at which ‘the level of stocks’ $`S`$ changes can be approximated as $`dS/dt=Q(p)D(p)`$. Thus a price adjustment relation that takes into account deviations of the stock level $`S`$ above certain optimal level $`S_o`$ (to meet any demand reasonably quickly) is given by

$$\frac{dp}{dt}=\gamma \frac{dS}{dt}+\lambda (S_oS),$$
(10)
where $`\gamma `$ (i.e., the inverse of excess demand required to move prices by one unity ) and $`\lambda `$ are positive factors. For $`\lambda >0`$, prices increase when stock levels are low and raise when they are high (with respect to $`S_o`$). When $`\lambda =0`$, the price adjusts at a rate proportional to the rate at which stocks are either raising or running down.

For all asset prices $`p(t)`$, non-linear forms for the quantities $`D`$ demanded and $`Q`$ supplied are postulated such that

$`D(p)`$ $`=`$ $`d^{}+d_o[\mathrm{\hspace{0.33em}1}{\displaystyle \frac{\delta ^2}{2!}}(pp^{})^2+\mathrm{}](pp^{}),`$ (11)
$`Q(p)`$ $`=`$ $`q^{}+q_o[\mathrm{\hspace{0.33em}1}{\displaystyle \frac{\delta ^2}{2!}}(pp^{})^2+\mathrm{}](pp^{}),`$ (12)
where $`d_o`$, $`q_o`$ and $`d^{}=D(p^{})`$, $`q^{}=Q(p^{})`$ are arbitrary coefficients (related to material costs, wage rate, etc), $`p^{}=p(t^{})`$ is an equilibrium price and $`\delta <0`$ is our order parameter as discussed in . Expansion terms $`𝒪(5)`$ are here neglected.

Considering the simplest, complete economics model as in , we assume that $`S_o`$ depends linearly on the demand; e.g., $`S_o=\mathrm{}_o+\mathrm{}D`$, with $`\mathrm{}_o`$ a constant and $`\mathrm{}`$ satisfying

$$\mathrm{}\frac{\gamma \beta _o}{\lambda d_o},$$
(13)
where $`\beta _oq_od_o`$. We have shown that only this condition can lead to solutions of the dynamical price equation in real space . Therefore, in equilibrium (where $`\frac{dp}{dt}|_p^{}=0`$ and $`\frac{dS}{dt}|_S^{}=0`$, so that demand equals supply and $`S=S_o`$), we obtain $`d^{}q^{}=0`$ and $`S^{}=\mathrm{}_o+\mathrm{}(d^{}+d_op^{})`$.

After some algebra, the second derivative of the price adjustment Eq.(10) of one commodity can be approximated as

$$\frac{d^2p}{dt^2}\lambda \beta _o(pp^{})+\frac{\delta ^2\lambda \beta _o}{2}(pp^{})^3.$$
(14)
For $`\delta 0`$ and $`[\lambda \beta _o,\delta ^2\lambda \beta _o/2]>0`$, it has the well-known kink solutions

$$p(t)=p^{}+\frac{\sqrt{2}}{\delta }\mathrm{tanh}(\sqrt{\frac{\lambda \beta _o}{2}}(tt^{})),$$
(15)
such that $`\beta _o`$ is positive. As in a competitive market economy the demand for a commodity fall when its price increases, then it is reasonable to assume $`d_o<0`$ in Eq.(11). And as the price raises, the supply usually also increases; hence in general one also assumes $`q_o>0`$. These conditions yield $`\beta _o>0`$ as required and also $`d_o\mathrm{}>0`$.

## IV The Mapping

We show next how a mapping can be established in order to identify the real, phenomenological RG critical exponents $`\alpha `$ and $`\eta `$ in terms of our non-linear economics model variables. From a comparison between Eqs.(5) and (14) we identify the following relation between the expansion terms

$`\alpha B`$ $``$ $`\delta \beta _o(pp^{}).`$ (16)
It is from this simple mapping that we can made an attempt to understand RG modelling of stock markets and from it to analyse and predict financial crashes in analogy to critical points studied in physics with log-periodic correction to scaling .

If for $`tt^{}`$ we approximate $`\mathrm{sinh}(\sqrt{\frac{\lambda \beta _o}{2}}(tt^{}))\sqrt{\frac{\lambda \beta _o}{2}}(tt^{})`$ such that

$$\mathrm{tanh}(\sqrt{\frac{\lambda \beta _o}{2}}(tt^{}))\frac{\sqrt{\frac{\lambda \beta _o}{2}}(tt^{})}{\sqrt{1+\frac{\lambda \beta _o}{2}(tt^{})^2}},$$
(17)
then using the mapping in Eq.(16) and the solutions for $`B`$ and $`p`$ given by Eqs.(6) and (15), respectively, we obtain

$`\alpha `$ $``$ $`\underset{tt_ct^{}}{lim}{\displaystyle \frac{\mathrm{log}((t^{}t)/\sqrt{2/\lambda \beta _o})}{\mathrm{log}(x/x_o)}}\mathrm{\hspace{0.33em}1},`$ (18)
$`|\eta |`$ $``$ $`{\displaystyle \frac{\delta ^2}{2\lambda ^2\beta _o^2}},`$ (19)
such that, as before $`x=t_ct`$ and $`x_o=\mathrm{\Delta }t`$, and $`\mathrm{\Delta }t\sqrt{2/\lambda \beta _o}`$. The above $`\alpha `$ is consistent with the definition of critical exponents .

Using these mappings for $`\alpha 1`$ and $`\eta `$, it is straightforward to show that they also relate the second series expansion terms between Eqs.(5) and (14), namely: $`\eta B^3\frac{\delta ^2\lambda \beta _o}{2}(pp^{})^3`$ provided that $`\delta <0`$. Hence, in terms of our non-linear economics model variables, we find the following extended solutions in analogy with the non-linear RG framework:

$`I\left(t\right)`$ $`=`$ $`A_1+A_2{\displaystyle \frac{\left(t^{}t\right)}{\sqrt{1+\left(\frac{t^{}t}{\mathrm{\Delta }t}\right)^2}}}\times `$ (21)
$`[1+A_3\mathrm{cos}(\omega \mathrm{log}(t^{}t)+{\displaystyle \frac{\mathrm{\Delta }\omega }{2}}\mathrm{log}(1+\left({\displaystyle \frac{t^{}t}{\mathrm{\Delta }t}}\right)^2)\left)\right],`$
with $`\tau t`$, $`\tau _ct^{}`$, $`\mathrm{\Delta }\omega 2(\lambda \beta _o/\delta )^2\kappa `$, and $`\mathrm{\Delta }\tau \sqrt{2/\lambda \beta _o}`$.

## V Discussion

As an example, we apply next the present mapping to the S&P500 index. In Fig. 1 we show the fit of Eq.(21) to the time dependence of the logarithm of the NY S&P 500 index from Jan 1985 to the October 1987 crash. The parameters used in this illustrative curve (full line) are: $`A_1=5.79`$, $`A_2=0.32`$, $`A_3=0.059`$, $`w=6.47`$, $`\mathrm{\Delta }t=2.29`$, $`\mathrm{\Delta }\omega =15.42`$ and $`t^{}=87.70`$ decimal years (with $`rms=0.02`$). The parameter values used for the best fit of Eq.(9) (dotted lines in the figure) are those found in .

Similarly to the non-linear RG scaling results, we see that the general trend of the S&P 500 data is also reproduced by the mapping of our economics model in the limit $`tt^{}`$ so that $`\alpha 1`$ as deduced from Eq.(18). This is to be expected due to the oscillations that are periodic in the logarithm of the time to crash appearing in both Eqs.(9) and (21).

The modulation of the logarithm frequency does not changes significatively when one approaches the critical point $`t_ct^{}`$. On relatively short time scales spikes are not accounted by both equations due to the complex self-organizing phenomena in stock markets other than the one analysed here. The log-periodic structure found prior to crashes implies the existence of a hierarchy of time scales . The choice of the parameters $`A_{i=1,2,3}`$ is still empirical in both cases.

Our mapping may give insight into the nature of market crashes from the new perspective of the demand $`D`$ and supply $`Q`$ of a commodity. Our non-linear expressions for $`D`$ and $`Q`$ of Eq.(11) are plotted in Fig. 2 and are justified as follows: when $`|\delta p|<<1`$, these functions display similar behaviour to the (commonly used) linear $`p`$-dependence for $`D`$ and $`Q`$. Even more important, they depict the fact that as price falls, the quantity demanded for a commodity can increase in agreement with one of the basic principles of economy. On the other hand, our choice for $`Q`$ (with $`q_o>0`$) also follows the typical behaviour observed in a competitive market (where no individual producer can set his own desired price). That is, the higher the price, the higher the profit, then the higher the supply (see  for a more extensive discussion).

We have related the critical exponents $`\alpha `$ and $`\eta `$ to the relevant variables of our non-linear economics model based on observed laws for $`D`$ and $`Q`$ . As $`tt^{}`$ we have identified $`\alpha 1`$ whereas the $`\eta `$ exponent given in Eq.(18) is found to depend on the order parameter $`\delta <0`$, relating $`D`$ and $`Q`$ of a commodity as in Eq.(11) in conjunction with the economics model factors $`\lambda `$ and $`\beta _o`$ under the limiting constraints of Eq.(17).

Since our $`\mathrm{\Delta }t`$ coefficient also depends on $`\lambda `$ and $`\beta _o`$, these factors drive the observed effects for $`t/t_c>>1`$, where there is a saturation of the function $`I(t)`$, and for $`tt_c`$, where the log-frequency shifts from $`\frac{\omega +\mathrm{\Delta }\omega }{2\pi }`$ to $`\frac{\omega }{2\pi }`$. In economics terms, these features are directly related to the temporal adjustments of ‘the level of stocks’ $`S`$ as given in Eq.(10).

The concept of a certain optimal level of stock is well-known in economics theory about stocks . Planning ahead to have suitable ‘level of stocks’ is essential. If production had to be stopped every time a company ran out of raw materials, the time wasted would cost a fortune.

Indeed stocks are held for a variety of reasons. There may be stocks of raw materials ready for production, stocks of work-in-progress (e.g., production parts) or stocks of finished goods. Whichever they are it is vital for a company to control ‘the level of stocks’ very carefully. Too little and they may run into production problems, but too much and they have tied up money unnecessarily. Low ‘level of stocks’ -say 10%- would certainly be adequate if production levels could be maintained during the years. Usually ‘the level of stocks’ needs to be adjusted as the marketing year progresses. Stocks are considered to be current assets because they can be converted into cash reasonably quickly. On the other hand, producers can also carry some stocks surplus as a way to speculate on prices.

## VI Conclusions

We have shown that the present economics mapping to the RG scaling of stock markets reasonably allows to reproduce the S&P 500 index trends in the vicinity of the time of crash and also to predict the existence of a crash as in the RG model due to corrections to the power law with log-periodicity but such that $`\alpha 1`$. The main point of this work follows that of RG model. That is, the underlying cause of the crash must be searched years before by looking at the progressive accelerating ascent of the market price. However, our formalism differs in that we have a shorter year scale of about $`\mathrm{\Delta }t=2.29`$ years compared to the fitting of $`\mathrm{\Delta }t=11`$ years as reported in  in which these cooperative phenomena are progressively being constructed. In this period of time, one should also look for the appearence of non-linearities in the behaviour of the demand and supply functions (or, alternatively, in ‘the level of stocks’) of the commodities prior to the crash as recognized here.

Acknowledgements: The author thanks the Organizers of the 2nd European Conference on ‘Applications of Physics in Financial Analysis’ held at Liège, Belgium (July 2000), and the European Physical Society for financial support.