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Gaussian Noise Effects on the Evolution of Wealth in a Closed System of n-Economies

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  • J. M. Pellon-Diaz
  • A. Aragones-Munoz
  • A. Sandoval-Villalbazo
  • A. Diaz-Reynoso

Abstract

Based on the stochastic model proposed by Patriarca-Kaski-Chakraborti that describes the exchange of wealth between $n$ economic agents, we analyze the evolution of the corresponding economies under the assumption of a Gaussian background, modeling the exchange parameter $\epsilon$. We demonstrate, that within Gaussian noise, the variance of the resulting wealth distribution will significantly decrease, and the equilibrium state is reached faster than in the case of a uniform distributed $\epsilon$ parameter. Also, we show that the system with Gaussian noise strongly resembles a deterministic system which is solved by means of a Z-Transform based technique.

Suggested Citation

  • J. M. Pellon-Diaz & A. Aragones-Munoz & A. Sandoval-Villalbazo & A. Diaz-Reynoso, 2011. "Gaussian Noise Effects on the Evolution of Wealth in a Closed System of n-Economies," Papers 1102.1713, arXiv.org, revised Feb 2011.
    • Handle: RePEc:arx:papers:1102.1713
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    References listed on IDEAS

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    1. Marco Patriarca & Anirban Chakraborti & Kimmo Kaski & Guido Germano, 2005. "Kinetic theory models for the distribution of wealth: power law from overlap of exponentials," Papers physics/0504153, arXiv.org, revised May 2005.
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