Power Law Distribution of Wealth in a Money-Based Model

Details Power Law Distribution of Wealth in a Money-Based Model Power Law Distribution of Wealth in a Money-Based Model

2004-05-13

arxiv.org/abs/cond-mat/0405288v1

Physical Review E, 71, 046135(2005)

Physics

Condensed Matter

Other Condensed Matter

5 pages and 4 figures

Scientific paper

10.1103/PhysRevE.71.046135

A money-based model for the power law distribution (PLD) of wealth in an economically interacting population is introduced. The basic feature of our model is concentrating on the capital movements and avoiding the complexity of micro behaviors of individuals. It is proposed as an extension of the Equiluz and Zimmermann's (EZ) model for crowding and information transmission in financial markets. Still, we must emphasize that in EZ model the PLD without exponential correction is obtained only for a particular parameter, while our pattern will give it within a wide range. The Zipf exponent depends on the parameters in a nontrivial way and is exactly calculated in this paper.

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