On a kinetic model for a simple market economy

Details On a kinetic model for a simple market economy On a kinetic model for a simple market economy

2004-12-21

arxiv.org/abs/math/0412429v1

Mathematics

Analysis of PDEs

Scientific paper

10.1007/s10955-005-5456-0

In this paper, we consider a simple kinetic model of economy involving both exchanges between agents and speculative trading. We show that the kinetic model admits non trivial quasi-stationary states with power law tails of Pareto type. In order to do this we consider a suitable asymptotic limit of the model yielding a Fokker-Planck equation for the distribution of wealth among individuals. For this equation the stationary state can be easily derived and shows a Pareto power law tail. Numerical results confirm the previous analysis.

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