Wealth distributions in asset exchange models
Abstract
A model for the evolution of the wealth distribution in an economically interacting population is introduced, in which a specified amount of assets are exchanged between two individuals when they interact. The resulting wealth distributions are determined for a variety of exchange rules. For "random" exchange, either individual is equally likely to gain in a trade, while "greedy" exchange, the richer individual gains. When the amount of asset traded is fixed, random exchange leads to a Gaussian wealth distribution, while greedy exchange gives a Fermilike scaled wealth distribution in the longtime limit. Multiplicative processes are also investigated, where the amount of asset exchanged is a finite fraction of the wealth of one of the traders. For random multiplicative exchange, a steady state occurs, while in greedy multiplicative exchange a continuously evolving power law wealth distribution arises.
 Publication:

European Physical Journal B
 Pub Date:
 March 1998
 DOI:
 10.1007/s100510050249
 arXiv:
 arXiv:condmat/9708018
 Bibcode:
 1998EPJB....2..267I
 Keywords:

 PACS. 02;
 02.50.Ga;
 05.70.Ln;
 05.40.+j;
 Markov processes;
 Nonequilibrium and irreversible thermodynamics;
 Condensed Matter  Statistical Mechanics;
 Quantitative Finance  General Finance
 EPrint:
 10 pages, RevTeX, 4 figures, to be submitted to PRE