Pareto's law: a model of human sharing and creativity
Statistical Mechanics
2008-12-02 v1 General Finance
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.
Keywords
Cite
@article{arxiv.cond-mat/0209373,
title = {Pareto's law: a model of human sharing and creativity},
author = {Nicola Scafetta and Sergio Picozzi and Bruce J. West},
journal= {arXiv preprint arXiv:cond-mat/0209373},
year = {2008}
}
Comments
4 pages, 4 figures