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Pareto Law in a Kinetic Model of Market with Random Saving Propensity | | Arnab Chatterjee
; Bikas K. Chakrabarti
; S. S. Manna
; | | Date: |
16 Dec 2002 | | Journal: | Physica A v.335 (2004) p.155-163 | | Subject: | Statistical Mechanics | cond-mat.stat-mech | | Abstract: | We have numerically simulated the ideal-gas models of trading markets, where each agent is identified with a gas molecule and each trading as an elastic or money-conserving two-body collision. Unlike in the ideal gas, we introduce (quenched) saving propensity of the agents, distributed widely between the agents ($0 le lambda < 1$). The system remarkably self-organizes to a critical Pareto distribution of money $P(m) sim m^{-(
u + 1)}$ with $
u simeq 1$. We analyse the robustness (universality) of the distribution in the model. We also argue that although the fractional saving ingredient is a bit unnatural one in the context of gas models, our model is the simplest so far, showing self-organized criticality, and combines two century-old distributions: Gibbs (1901) and Pareto (1897) distributions. | | Source: | arXiv, cond-mat/0301289 | | Services: | Forum | Review | PDF | Favorites | |
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