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Ideal Gas-Like Distributions in Economics: Effects of Saving Propensity

  • Bikas K. Chakrabarti
  • Arnab Chatterjee
Conference paper

Abstract

We consider the ideal-gas models of trading markets. where each agent is identified with a gas molecule and each trading an as alastic or money-conserving (two-body) collision. Unlike in the ideal gas. we introduce saving propensity λ of agents, such that each agents 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≠0 and Pareto-like when λ is widely distributed among the agents. Wr compare these results with observations on wealth distributions of various countries

Keywords

High Income Group Wealth Distribution Trading Market Saving Propensity Pareto Index 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer Japan 2004

Authors and Affiliations

  • Bikas K. Chakrabarti
    • 1
  • Arnab Chatterjee
    • 1
  1. 1.Saha Institute of Nuclear PhysicsKolkataIndia

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