Ideal-Gas Like Markets : An Exact Solution
Year: 2006
Type: preprint
Abstract: We provide an exact solution to the ideal gas like models studied in econophysics to understand the microscopic origin of Pareto-law. In these class of models the key ingredient necessary for having a self organized scale free steady state distribution is the trading/collision rule where agents/particles save a definite fraction of their wealth/energy and invests the rest for trading. Using Gibbs ensemble approach we could obtain the exact distribution of wealth in this model. Moreover we show that in this model (a) good savers are always rich and (b) every agent poor or rich invests the same amount for trading. Non-linear trading rules could alter the generic scenario observed here.
Source: arXiv (Cornell University)
Author: P. K. Mohanty
Language: English
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2804290951