Wealth distributions in asset exchange models

  • S. Ispolatov
  • P.L. Krapivsky
  • S. Redner
Article

DOI: 10.1007/s100510050249

Cite this article as:
Ispolatov, S., Krapivsky, P. & Redner, S. Eur. Phys. J. B (1998) 2: 267. doi:10.1007/s100510050249

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 Fermi-like scaled wealth distribution in the long-time 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.

PACS. 02.50.Ga Markov processes - 05.70.Ln Nonequilibrium thermodynamics, irreversible processes - 05.40.+j Fluctuation phenomena, random processes, and Brownian motion 

Copyright information

© EDP Sciences, Springer-Verlag 1998

Authors and Affiliations

  • S. Ispolatov
    • 1
  • P.L. Krapivsky
    • 1
  • S. Redner
    • 1
  1. 1.Center for Polymer Studies and Department of PhysicsBoston UniversityBostonUSA

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