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An analytic treatment of the Gibbs-Pareto behavior in wealth distribution

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  • Arnab Das
  • Sudhakar Yarlagadda

Abstract

We develop a general framework, based on Boltzmann transport theory, to analyze the distribution of wealth in societies. Within this framework we derive the distribution function of wealth by using a two-party trading model for the poor people while for the rich people a new model is proposed where interaction with wealthy entities (huge reservoir) is relevant. At equilibrium, the interaction with wealthy entities gives a power-law (Pareto-like) behavior in the wealth distribution while the two-party interaction gives a Boltzmann-Gibbs distribution.

Suggested Citation

  • Arnab Das & Sudhakar Yarlagadda, 2004. "An analytic treatment of the Gibbs-Pareto behavior in wealth distribution," Papers cond-mat/0409329, arXiv.org, revised Mar 2005.
    • Handle: RePEc:arx:papers:cond-mat/0409329
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    Cited by:

    1. Patriarca, Marco & Chakraborti, Anirban & Germano, Guido, 2006. "Influence of saving propensity on the power-law tail of the wealth distribution," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 369(2), pages 723-736.
    2. Heck, Ines & Kapeller, Jakob & Wildauer, Rafael, 2020. "Vermögenskonzentration in Österreich: Ein Update auf Basis des HFCS 2017," Greenwich Papers in Political Economy 30683, University of Greenwich, Greenwich Political Economy Research Centre.
    3. 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.
    4. Victor M. Yakovenko & J. Barkley Rosser, 2009. "Colloquium: Statistical mechanics of money, wealth, and income," Papers 0905.1518, arXiv.org, revised Dec 2009.
    5. Ines Heck & Jakob Kapeller & Rafael Wildauer, 2020. "Vermögenskonzentration in Österreich," Working Paper Reihe der AK Wien - Materialien zu Wirtschaft und Gesellschaft 206, Kammer für Arbeiter und Angestellte für Wien, Abteilung Wirtschaftswissenschaft und Statistik.

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