An analytic treatment of the Gibbs-Pareto behavior in wealth distribution
AbstractWe develop a general framework, based on Boltzmann transport theory, to analyze the distribution of wealth in societies. Within this framework we derive the distribution function of wealth by using a two-party trading model for the poor people while for the rich people a new model is proposed where interaction with wealthy entities (huge reservoir) is relevant. At equilibrium, the interaction with wealthy entities gives a power-law (Pareto-like) behavior in the wealth distribution while the two-party interaction gives a Boltzmann-Gibbs distribution.
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Bibliographic InfoPaper provided by arXiv.org in its series Papers with number cond-mat/0409329.
Date of creation: Sep 2004
Date of revision: Mar 2005
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- Victor M. Yakovenko & J. Barkley Rosser, 2009. "Colloquium: Statistical mechanics of money, wealth, and income," Science & Finance (CFM) working paper archive 0905.1518, Science & Finance, Capital Fund Management, revised Dec 2009.
- Patriarca, Marco & Chakraborti, Anirban & Germano, Guido, 2006. "Influence of saving propensity on the power-law tail of the wealth distribution," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 369(2), pages 723-736.
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