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arxiv: cond-mat/0409329 · v2 · pith:VPZJ2IIZnew · submitted 2004-09-13 · ❄️ cond-mat.stat-mech · cond-mat.other· q-fin.GN

An analytic treatment of the Gibbs-Pareto behavior in wealth distribution

classification ❄️ cond-mat.stat-mech cond-mat.otherq-fin.GN
keywords distributionwealthinteractionbehaviorentitiesframeworkgivesmodel
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We develop a general framework, based on Boltzmann transport theory, to analyze the distribution of wealth in societies. Within this framework we derive the distribution function of wealth by using a two-party trading model for the poor people while for the rich people a new model is proposed where interaction with wealthy entities (huge reservoir) is relevant. At equilibrium, the interaction with wealthy entities gives a power-law (Pareto-like) behavior in the wealth distribution while the two-party interaction gives a Boltzmann-Gibbs distribution.

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