Wealth Distributions in Asset Exchange Models
Abstract
How do individuals accumulate wealth as they interact economically? We outline the consequences of a simple microscopic model in which repeated pairwise exchanges of assets between individuals build the wealth distribution of a population. This distribution is determined for generic exchange rules --- transactions that involve a fixed amount or a fixed fraction of individual wealth, as well as random or greedy exchanges. In greedy multiplicative exchange, a continuously evolving power law wealth distribution arises, a feature that qualitatively mimics empirical observations.
Cite
@article{arxiv.1006.4595,
title = {Wealth Distributions in Asset Exchange Models},
author = {P. L. Krapivsky and S. Redner},
journal= {arXiv preprint arXiv:1006.4595},
year = {2010}
}
Comments
5 pages, 2 figures, revtex4 2-column format. To appear in "Econophysics", a special issue in Science and Culture (Kolkata, India) to celebrate 15 years of Econophysics. Trivial typos fixed for the final version