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arxiv: 1412.7227 · v1 · pith:X6P4S7SLnew · submitted 2014-12-23 · 💱 q-fin.GN · physics.soc-ph

An H theorem for Boltzmann's equation for the Yard-Sale Model of asset exchange

classification 💱 q-fin.GN physics.soc-ph
keywords modelboltzmannassetequationsexchangefokker-planckworkyard-sale
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In recent work, Boltzmann and Fokker-Planck equations were derived for the "Yard-Sale Model" of asset exchange. For the version of the model without redistribution, it was conjectured, based on numerical evidence, that the time-asymptotic state of the model was oligarchy -- complete concentration of wealth by a single individual. In this work, we prove that conjecture by demonstrating that the Gini coefficient, a measure of inequality commonly used by economists, is an $H$ function of both the Boltzmann and Fokker-Planck equations for the model.

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