Kinetics of wealth and the Pareto law

An important class of economic models involve agents whose wealth changes due to transactions with other agents. Several authors have pointed out an analogy with kinetic theory, which describes molecules whose momentum and energy change due to interactions with other molecules. We pursue this analog...

Ausführliche Beschreibung

Gespeichert in:
Bibliographische Detailangaben
Veröffentlicht in:Physical review. E, Statistical, nonlinear, and soft matter physics Statistical, nonlinear, and soft matter physics, 2014-04, Vol.89 (4), p.042804-042804, Article 042804
1. Verfasser: Boghosian, Bruce M
Format: Artikel
Sprache:eng
Online-Zugang:Volltext
Tags: Tag hinzufügen
Keine Tags, Fügen Sie den ersten Tag hinzu!
container_end_page 042804
container_issue 4
container_start_page 042804
container_title Physical review. E, Statistical, nonlinear, and soft matter physics
container_volume 89
creator Boghosian, Bruce M
description An important class of economic models involve agents whose wealth changes due to transactions with other agents. Several authors have pointed out an analogy with kinetic theory, which describes molecules whose momentum and energy change due to interactions with other molecules. We pursue this analogy and derive a Boltzmann equation for the time evolution of the wealth distribution of a population of agents for the so-called Yard-Sale Model of wealth exchange. We examine the solutions to this equation by a combination of analytical and numerical methods and investigate its long-time limit. We study an important limit of this equation for small transaction sizes and derive a partial integrodifferential equation governing the evolution of the wealth distribution in a closed economy. We then describe how this model can be extended to include features such as inflation, production, and taxation. In particular, we show that the model with taxation exhibits the basic features of the Pareto law, namely, a lower cutoff to the wealth density at small values of wealth, and approximate power-law behavior at large values of wealth.
doi_str_mv 10.1103/PhysRevE.89.042804
format Article
fullrecord <record><control><sourceid>proquest_cross</sourceid><recordid>TN_cdi_proquest_miscellaneous_1526730678</recordid><sourceformat>XML</sourceformat><sourcesystem>PC</sourcesystem><sourcerecordid>1526730678</sourcerecordid><originalsourceid>FETCH-LOGICAL-c347t-620e03b8e117d46655486a824bb1ddf30a45cce4aa27c4490ee44c414391bbb73</originalsourceid><addsrcrecordid>eNo9kE1PAjEURRujEUT_gAszGxM3g6_t67SzNAQ_IonE6LppO2_CmIHB6QDh3wsBXN27uOcuDmO3HIacg3yczrbxk9bjocmHgMIAnrE-VwpSIXV2vu8yT6VWqseuYvwBkEIavGQ9gUZokUOf3b9XC-qqEJOmTDbk6m6WuEWRdDNKpq6lrklqt7lmF6WrI90cc8C-n8dfo9d08vHyNnqapEGi7tJMAIH0hjjXBWaZUmgyZwR6z4uilOBQhUDonNABMQcixIAcZc6991oO2MPhd9k2vyuKnZ1XMVBduwU1q2i5EpmWkGmzm4rDNLRNjC2VdtlWc9duLQe712NPeqzJ7UHPDro7_q_8nIp_5ORD_gFXI2AM</addsrcrecordid><sourcetype>Aggregation Database</sourcetype><iscdi>true</iscdi><recordtype>article</recordtype><pqid>1526730678</pqid></control><display><type>article</type><title>Kinetics of wealth and the Pareto law</title><source>American Physical Society Journals</source><creator>Boghosian, Bruce M</creator><creatorcontrib>Boghosian, Bruce M</creatorcontrib><description>An important class of economic models involve agents whose wealth changes due to transactions with other agents. Several authors have pointed out an analogy with kinetic theory, which describes molecules whose momentum and energy change due to interactions with other molecules. We pursue this analogy and derive a Boltzmann equation for the time evolution of the wealth distribution of a population of agents for the so-called Yard-Sale Model of wealth exchange. We examine the solutions to this equation by a combination of analytical and numerical methods and investigate its long-time limit. We study an important limit of this equation for small transaction sizes and derive a partial integrodifferential equation governing the evolution of the wealth distribution in a closed economy. We then describe how this model can be extended to include features such as inflation, production, and taxation. In particular, we show that the model with taxation exhibits the basic features of the Pareto law, namely, a lower cutoff to the wealth density at small values of wealth, and approximate power-law behavior at large values of wealth.</description><identifier>ISSN: 1539-3755</identifier><identifier>EISSN: 1550-2376</identifier><identifier>DOI: 10.1103/PhysRevE.89.042804</identifier><identifier>PMID: 24827290</identifier><language>eng</language><publisher>United States</publisher><ispartof>Physical review. E, Statistical, nonlinear, and soft matter physics, 2014-04, Vol.89 (4), p.042804-042804, Article 042804</ispartof><oa>free_for_read</oa><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c347t-620e03b8e117d46655486a824bb1ddf30a45cce4aa27c4490ee44c414391bbb73</citedby><cites>FETCH-LOGICAL-c347t-620e03b8e117d46655486a824bb1ddf30a45cce4aa27c4490ee44c414391bbb73</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><link.rule.ids>314,780,784,2876,2877,27924,27925</link.rule.ids><backlink>$$Uhttps://www.ncbi.nlm.nih.gov/pubmed/24827290$$D View this record in MEDLINE/PubMed$$Hfree_for_read</backlink></links><search><creatorcontrib>Boghosian, Bruce M</creatorcontrib><title>Kinetics of wealth and the Pareto law</title><title>Physical review. E, Statistical, nonlinear, and soft matter physics</title><addtitle>Phys Rev E Stat Nonlin Soft Matter Phys</addtitle><description>An important class of economic models involve agents whose wealth changes due to transactions with other agents. Several authors have pointed out an analogy with kinetic theory, which describes molecules whose momentum and energy change due to interactions with other molecules. We pursue this analogy and derive a Boltzmann equation for the time evolution of the wealth distribution of a population of agents for the so-called Yard-Sale Model of wealth exchange. We examine the solutions to this equation by a combination of analytical and numerical methods and investigate its long-time limit. We study an important limit of this equation for small transaction sizes and derive a partial integrodifferential equation governing the evolution of the wealth distribution in a closed economy. We then describe how this model can be extended to include features such as inflation, production, and taxation. In particular, we show that the model with taxation exhibits the basic features of the Pareto law, namely, a lower cutoff to the wealth density at small values of wealth, and approximate power-law behavior at large values of wealth.</description><issn>1539-3755</issn><issn>1550-2376</issn><fulltext>true</fulltext><rsrctype>article</rsrctype><creationdate>2014</creationdate><recordtype>article</recordtype><recordid>eNo9kE1PAjEURRujEUT_gAszGxM3g6_t67SzNAQ_IonE6LppO2_CmIHB6QDh3wsBXN27uOcuDmO3HIacg3yczrbxk9bjocmHgMIAnrE-VwpSIXV2vu8yT6VWqseuYvwBkEIavGQ9gUZokUOf3b9XC-qqEJOmTDbk6m6WuEWRdDNKpq6lrklqt7lmF6WrI90cc8C-n8dfo9d08vHyNnqapEGi7tJMAIH0hjjXBWaZUmgyZwR6z4uilOBQhUDonNABMQcixIAcZc6991oO2MPhd9k2vyuKnZ1XMVBduwU1q2i5EpmWkGmzm4rDNLRNjC2VdtlWc9duLQe712NPeqzJ7UHPDro7_q_8nIp_5ORD_gFXI2AM</recordid><startdate>201404</startdate><enddate>201404</enddate><creator>Boghosian, Bruce M</creator><scope>NPM</scope><scope>AAYXX</scope><scope>CITATION</scope><scope>7X8</scope></search><sort><creationdate>201404</creationdate><title>Kinetics of wealth and the Pareto law</title><author>Boghosian, Bruce M</author></sort><facets><frbrtype>5</frbrtype><frbrgroupid>cdi_FETCH-LOGICAL-c347t-620e03b8e117d46655486a824bb1ddf30a45cce4aa27c4490ee44c414391bbb73</frbrgroupid><rsrctype>articles</rsrctype><prefilter>articles</prefilter><language>eng</language><creationdate>2014</creationdate><toplevel>online_resources</toplevel><creatorcontrib>Boghosian, Bruce M</creatorcontrib><collection>PubMed</collection><collection>CrossRef</collection><collection>MEDLINE - Academic</collection><jtitle>Physical review. E, Statistical, nonlinear, and soft matter physics</jtitle></facets><delivery><delcategory>Remote Search Resource</delcategory><fulltext>fulltext</fulltext></delivery><addata><au>Boghosian, Bruce M</au><format>journal</format><genre>article</genre><ristype>JOUR</ristype><atitle>Kinetics of wealth and the Pareto law</atitle><jtitle>Physical review. E, Statistical, nonlinear, and soft matter physics</jtitle><addtitle>Phys Rev E Stat Nonlin Soft Matter Phys</addtitle><date>2014-04</date><risdate>2014</risdate><volume>89</volume><issue>4</issue><spage>042804</spage><epage>042804</epage><pages>042804-042804</pages><artnum>042804</artnum><issn>1539-3755</issn><eissn>1550-2376</eissn><abstract>An important class of economic models involve agents whose wealth changes due to transactions with other agents. Several authors have pointed out an analogy with kinetic theory, which describes molecules whose momentum and energy change due to interactions with other molecules. We pursue this analogy and derive a Boltzmann equation for the time evolution of the wealth distribution of a population of agents for the so-called Yard-Sale Model of wealth exchange. We examine the solutions to this equation by a combination of analytical and numerical methods and investigate its long-time limit. We study an important limit of this equation for small transaction sizes and derive a partial integrodifferential equation governing the evolution of the wealth distribution in a closed economy. We then describe how this model can be extended to include features such as inflation, production, and taxation. In particular, we show that the model with taxation exhibits the basic features of the Pareto law, namely, a lower cutoff to the wealth density at small values of wealth, and approximate power-law behavior at large values of wealth.</abstract><cop>United States</cop><pmid>24827290</pmid><doi>10.1103/PhysRevE.89.042804</doi><tpages>1</tpages><oa>free_for_read</oa></addata></record>
fulltext fulltext
identifier ISSN: 1539-3755
ispartof Physical review. E, Statistical, nonlinear, and soft matter physics, 2014-04, Vol.89 (4), p.042804-042804, Article 042804
issn 1539-3755
1550-2376
language eng
recordid cdi_proquest_miscellaneous_1526730678
source American Physical Society Journals
title Kinetics of wealth and the Pareto law
url https://sfx.bib-bvb.de/sfx_tum?ctx_ver=Z39.88-2004&ctx_enc=info:ofi/enc:UTF-8&ctx_tim=2024-12-25T12%3A26%3A43IST&url_ver=Z39.88-2004&url_ctx_fmt=infofi/fmt:kev:mtx:ctx&rfr_id=info:sid/primo.exlibrisgroup.com:primo3-Article-proquest_cross&rft_val_fmt=info:ofi/fmt:kev:mtx:journal&rft.genre=article&rft.atitle=Kinetics%20of%20wealth%20and%20the%20Pareto%20law&rft.jtitle=Physical%20review.%20E,%20Statistical,%20nonlinear,%20and%20soft%20matter%20physics&rft.au=Boghosian,%20Bruce%20M&rft.date=2014-04&rft.volume=89&rft.issue=4&rft.spage=042804&rft.epage=042804&rft.pages=042804-042804&rft.artnum=042804&rft.issn=1539-3755&rft.eissn=1550-2376&rft_id=info:doi/10.1103/PhysRevE.89.042804&rft_dat=%3Cproquest_cross%3E1526730678%3C/proquest_cross%3E%3Curl%3E%3C/url%3E&disable_directlink=true&sfx.directlink=off&sfx.report_link=0&rft_id=info:oai/&rft_pqid=1526730678&rft_id=info:pmid/24827290&rfr_iscdi=true