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Pareto's law: a model of human sharing and creativity

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  • Nicola Scafetta
  • Sergio Picozzi
  • Bruce J. West

Abstract

A computational model for the distribution of wealth among the members of an ideal society is presented. It is determined that a realistic distribution of wealth depends upon two mechanisms: an asymmetric flux of wealth in trading transactions that advantages the poorer of the two traders and a non-stationary creation and destruction of individual wealth. The former mechanism redistributes wealth by reducing the gap between the rich and poor, leading to the emergence of a middle class. The latter mechanism, together with the former one, generates a distribution of wealth having a power-law tail that is compatible with Pareto's law.

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  • Nicola Scafetta & Sergio Picozzi & Bruce J. West, 2002. "Pareto's law: a model of human sharing and creativity," Papers cond-mat/0209373, arXiv.org.
    • Handle: RePEc:arx:papers:cond-mat/0209373
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