Money Distributions in Chaotic Economies

Details Money Distributions in Chaotic Economies Money Distributions in Chaotic Economies

2009-06-10

arxiv.org/abs/0906.1899v1

Economy

Quantitative Finance

General Finance

5 pages, 7 figures, 1 table ; NOMA-2009 Conference, Urbino (Italy)

Scientific paper

This paper considers the ideal gas-like model of trading markets, where each individual is identified as a gas molecule that interacts with others trading in elastic or money-conservative collisions. Traditionally this model introduces different rules of random selection and exchange between pair agents. Real economic transactions are complex but obviously non-random. Consequently, unlike this traditional model, this work implements chaotic elements in the evolution of an economic system. In particular, we use a chaotic signal that breaks the natural pairing symmetry $(i,j)\Leftrightarrow(j,i)$ of a random gas-like model. As a result of that, it is found that a chaotic market like this can reproduce the referenced wealth distributions observed in real economies (the Gamma, Exponential and Pareto distributions).

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