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Inequalities of wealth distribution in a conservative economy

Author

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  • Pianegonda, S.
  • Iglesias, J.R.

Abstract

We analyze a conservative market model for the competition among economic agents in a society with conserved total wealth. A minimum dynamics ensures that the poorest agent has a chance to improve its economic welfare. After a transient, the system self-organizes into a critical state where the wealth distribution have a minimum threshold, with almost no agent below this poverty line. Also, very few extremely rich agents are stable in time. Above the poverty line the distribution follows an exponential behavior. The local solution exhibits a low Gini index, while the mean field solution of the model generates a wealth distribution similar to welfare states like Sweden.

Suggested Citation

  • Pianegonda, S. & Iglesias, J.R., 2004. "Inequalities of wealth distribution in a conservative economy," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 342(1), pages 193-199.
    • Handle: RePEc:eee:phsmap:v:342:y:2004:i:1:p:193-199
    DOI: 10.1016/j.physa.2004.04.078
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    Citations

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    Cited by:

    1. M. A. Fuentes & M. N. Kuperman & J. R. Iglesias, 2006. "Living in an Irrational Society: Wealth Distribution with Correlations between Risk and Expected Profits," Papers physics/0603076, arXiv.org.
    2. Fuentes, Miguel A. & Kuperman, M. & Iglesias, J.R., 2006. "Living in an irrational society: Wealth distribution with correlations between risk and expected profits," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 371(1), pages 112-117.
    3. Marcel Ausloos, 2013. "Econophysics: Comments on a Few Applications, Successes, Methods and Models," IIM Kozhikode Society & Management Review, , vol. 2(2), pages 101-115, July.
    4. Max Greenberg & H. Oliver Gao, 2024. "Twenty-five years of random asset exchange modeling," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 97(6), pages 1-27, June.
    5. Neñer, Julian & Laguna, María Fabiana, 2021. "Optimal risk in wealth exchange models: Agent dynamics from a microscopic perspective," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 566(C).
    6. J. R. Iglesias & R. M. C. de Almeida, 2011. "Entropy and equilibrium state of free market models," Papers 1108.5725, arXiv.org.
    7. Sebastian Guala, 2009. "Taxes in a Wealth Distribution Model by Inelastically Scattering of Particles," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 7(1), pages 1-7.
    8. Sebastian D. Guala, 2008. "Taxes in a simple wealth distribution model by inelastically scattering particles," Papers 0807.4484, arXiv.org.

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