Ideal Gas-Like Distributions in Economics: Effects of Saving Propensity
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We consider the ideal-gas models of trading markets, where each agent is identified with a gas molecule and each trading as an elastic or money-conserving (two-body) collision. Unlike in the ideal gas, we introduce saving propensity $λ$ of agents, such that each agent saves a fraction $λ$ of its money and trades with the rest. We show the steady-state money or wealth distribution in a market is Gibbs-like for $λ=0$, has got a non-vanishing most-probable value for $λ\ne 0$ and Pareto-like when $λ$ is widely distributed among the agents. We compare these results with observations on wealth distributions of various countries.
6 pages, 3 eps figures. To be published in `Application of Econophysics', Ed. H. Takayasu, Springer-Verlag, Tokyo (2003): Proc. 2nd. Nikkei Symposium on Econophysics, Tokyo, Nov. 2002
6 pages, 3 eps figures. To be published in `Application of Econophysics', Ed. H. Takayasu, Springer-Verlag, Tokyo (2003): Proc. 2nd. Nikkei Symposium on Econophysics, Tokyo, Nov. 2002