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

  • Bikas K. Chakrabarti
  • Arnab Chatterjee
Conference paper


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


High Income Group Wealth Distribution Trading Market Saving Propensity Pareto Index 
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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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