Analyzing money distributions in `ideal gas' models of markets

Abstract

We analyze an ideal gas like models of a trading market. We propose a new fit for the money distribution in the fixed or uniform saving market. For the marketwith quenched random saving factors for its agents we show that the steady state income ($m$) distribution $P(m)$ in the model has a power law tail with Pareto index $ν$ exactly equal to unity, confirming the earlier numerical studies on this model. We analyze the distribution of mutual money difference and also develop a master equation for the time development of $P(m)$. Precise solutions are then obtained in some special cases.

6 pages, 1 eps figure, Springer class file svmult.cls; To appear in "Practical Fruits of Econophysics", Ed. H. Takayasu (Springer-Verlag Tokyo), Proc. 3rd Nikkei Econophysics Symposium, Tokyo, Nov 2004