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Money distribution in agent-based models with position-exchange dynamics: the Pareto paradigm revisited

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Abstract

Wealth and income distributions are known to feature country-specific Pareto exponents for their long power-law tails. To propose a rationale for this, we introduce an agent-based dynamic model and use Monte Carlo simulations to unveil the wealth distributions in closed and open economical systems. The standard money-exchange scenario is supplemented with the position-exchange agent dynamics that vitally affects the Pareto law. Specifically, in closed systems with position-exchange dynamics the power law changes to an exponential shape, while for open systems with traps the Pareto law remains valid.

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Authors and Affiliations

  1. Department of Physics, Istanbul University, 34134, Istanbul, Turkey

    Ekrem Aydiner

  2. Institute for Physics & Astronomy, University of Potsdam, 14476, Potsdam-Golm, Germany

    Andrey G. Cherstvy & Ralf Metzler

Authors
  1. Ekrem Aydiner
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  2. Andrey G. Cherstvy
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  3. Ralf Metzler
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Correspondence to Ekrem Aydiner.

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Supplementary material in the form of one pdf file available from the Journal web page at https://doi.org/10.1140/epjb/e2019-90674-0

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Aydiner, E., Cherstvy, A.G. & Metzler, R. Money distribution in agent-based models with position-exchange dynamics: the Pareto paradigm revisited. Eur. Phys. J. B 92, 104 (2019). https://doi.org/10.1140/epjb/e2019-90674-0

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  • DOI: https://doi.org/10.1140/epjb/e2019-90674-0

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