Wealth Distributions in Asset Exchange Models

Abstract

How do individuals accumulate wealth as they interact economically? We outline the consequences of a simple microscopic model in which repeated pairwise exchanges of assets between individuals build the wealth distribution of a population. This distribution is determined for generic exchange rules --- transactions that involve a fixed amount or a fixed fraction of individual wealth, as well as random or greedy exchanges. In greedy multiplicative exchange, a continuously evolving power law wealth distribution arises, a feature that qualitatively mimics empirical observations.

5 pages, 2 figures, revtex4 2-column format. To appear in "Econophysics", a special issue in Science and Culture (Kolkata, India) to celebrate 15 years of Econophysics. Trivial typos fixed for the final version