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Generic features of the wealth distribution in ideal-gas-like markets

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  • P. K. Mohanty

Abstract

We provide an exact solution to the ideal-gas-like models studied in econophysics to understand the microscopic origin of Pareto-law. In these class of models the key ingredient necessary for having a self-organized scale-free steady-state distribution is the trading or collision rule where agents or particles save a definite fraction of their wealth or energy and invests the rest for trading. Using a Gibbs ensemble approach we could obtain the exact distribution of wealth in this model. Moreover we show that in this model (a) good savers are always rich and (b) every agent poor or rich invests the same amount for trading. Nonlinear trading rules could alter the generic scenario observed here.

Suggested Citation

  • P. K. Mohanty, 2006. "Generic features of the wealth distribution in ideal-gas-like markets," Papers physics/0603141, arXiv.org, revised Jul 2006.
  • Handle: RePEc:arx:papers:physics/0603141
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    1. repec:spr:jeicoo:v:12:y:2017:i:1:d:10.1007_s11403-015-0148-6 is not listed on IDEAS
    2. Chakrabarti, Anindya S., 2011. "An almost linear stochastic map related to the particle system models of social sciences," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 390(23), pages 4370-4378.
    3. Anirban Chakraborti & Ioane Muni Toke & Marco Patriarca & Frédéric Abergel, 2011. "Econophysics review: II. Agent-based models," Post-Print hal-00621059, HAL.
    4. Anindya S. Chakrabarti, 2011. "Firm dynamics in a closed, conserved economy: A model of size distribution of employment and related statistics," Papers 1112.2168, arXiv.org.

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