A common mode of origin of power laws in models of market and earthquake
AbstractWe show that there is a common mode of origin for the power laws observed in two different models: (i) the Pareto law for the distribution of money among the agents with random-saving propensities in an ideal gas-like market model and (ii) the Gutenberg–Richter law for the distribution of overlaps in a fractal-overlap model for earthquakes. We find that the power laws appear as the asymptotic forms of ever-widening log-normal distributions for the agents’ money and the overlap magnitude, respectively. The identification of the generic origin of the power laws helps in better understanding and in developing generalized views of phenomena in such diverse areas as economics and geophysics.
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Bibliographic InfoArticle provided by Elsevier in its journal Physica A: Statistical Mechanics and its Applications.
Volume (Year): 381 (2007)
Issue (Month): C ()
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Web page: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/
Wealth distribution; Earthquake model; Log-normal distribution; Power-law distribution;
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- Victor M. Yakovenko & J. Barkley Rosser, 2009. "Colloquium: Statistical mechanics of money, wealth, and income," Papers 0905.1518, arXiv.org, revised Dec 2009.
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