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On a kinetic model for a simple market economy

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  • Stephane Cordier

    (MAPMO)

  • Lorenzo Pareschi
  • Giuseppe Toscani

Abstract

In this paper, we consider a simple kinetic model of economy involving both exchanges between agents and speculative trading. We show that the kinetic model admits non trivial quasi-stationary states with power law tails of Pareto type. In order to do this we consider a suitable asymptotic limit of the model yielding a Fokker-Planck equation for the distribution of wealth among individuals. For this equation the stationary state can be easily derived and shows a Pareto power law tail. Numerical results confirm the previous analysis.

Suggested Citation

  • Stephane Cordier & Lorenzo Pareschi & Giuseppe Toscani, 2004. "On a kinetic model for a simple market economy," Papers math/0412429, arXiv.org.
    • Handle: RePEc:arx:papers:math/0412429
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    File URL: http://arxiv.org/pdf/math/0412429
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