Econophysics is a transdisciplinary research field in heterodox economics. It applies theories and methods originally developed by physicists to problems in economics, usually those including uncertainty or stochastic processes and nonlinear dynamics. Some of its application to the study of financial markets has also been termed statistical finance referring to its roots in statistical physics. Econophysics is closely related to social physics.

Physicists' interest in the economics is not new. Daniel Bernoulli, as an example, was the originator of utility-based preferences. Likewise, Jan Tinbergen, who won the first Nobel Memorial Prize in Economic Sciences in 1969 for having developed and applied dynamic models for the analysis of economic processes, studied physics with Paul Ehrenfest at Leiden University. Tinbergen classified some economic statistics as instruments used to achieve other statistics set as targets, a concept used by modern central banks when the use interest rates to control inflation. Tinbergen developed the gravity model of international trade that has become the workhorse of international economics.^{[citation needed]} One of the founders of neoclassical economic theory, former Yale University Professor of Economics Irving Fisher, was originally trained under the renowned Yale physicist, Josiah Willard Gibbs.

Econophysics was started in the mid-1990s by several physicists working in the subfield of statistical mechanics. Unsatisfied with the traditional explanations and approaches of economists – which usually prioritized simplified approaches for the sake of soluble theoretical models over agreement with empirical data – they applied tools and methods from physics, first to try to match financial data sets, and then to explain more general economic phenomena.^{[citation needed]}

One driving force behind econophysics arising at this time was the sudden availability of large amounts of financial data, starting in the 1980s. It became apparent that traditional methods of analysis were insufficient – standard economic methods dealt with homogeneous agents and equilibrium, while many of the more interesting phenomena in financial markets fundamentally depended on heterogeneous agents and far-from-equilibrium situations.^{[citation needed]}

The term "econophysics" was coined by H. Eugene Stanley, to describe the large number of papers written by physicists in the problems of (stock and other) markets, in a conference on statistical physics in Kolkata (erstwhile Calcutta) in 1995 organized by Bikas Chakrabarti and first appeared in its proceedings publication in Physica A 1996. The inaugural meeting on econophysics was organised in 1998 in Budapest by János Kertész and Imre Kondor. The first book on econophysics was by R. N. Mantegna & H. E. Stanley in 2000.

In the same year, 1998, the Palermo International Workshop on Econophysics and Statistical Finance was held at the University of Palermo. The related "Econophysics Colloquium," now an annual event, was first held in Canberra in 2005. The 2018 Econophysics Colloquium was held in Palermo on the 30th anniversary of the original Palermo Workshop; it was organized by Rosario N. Mantegna and Salvatore Miccichè.

The almost regular meeting series on the topic include: Econophys-Kolkata (held in Kolkata & Delhi), Econophysics Colloquium, ESHIA/ WEHIA.

Basic tools of econophysics are probabilistic and statistical methods often taken from statistical physics.