{
  "id": "cond-mat/0301289",
  "version": "v3",
  "published": "2003-01-16T13:46:49.000Z",
  "updated": "2004-01-27T14:00:46.000Z",
  "title": "Pareto Law in a Kinetic Model of Market with Random Saving Propensity",
  "authors": [
    "Arnab Chatterjee",
    "Bikas K. Chakrabarti",
    "S. S. Manna"
  ],
  "comment": "5 pages RevTeX4, 6 eps figures, to be published in Physica A (2004)",
  "journal": "Physica A v.335 (2004) p.155-163",
  "doi": "10.1016/j.physa.2003.11.014",
  "categories": [
    "cond-mat.stat-mech",
    "q-fin.GN"
  ],
  "abstract": "We have numerically simulated the ideal-gas models of trading markets, where each agent is identified with a gas molecule and each trading as an elastic or money-conserving two-body collision. Unlike in the ideal gas, we introduce (quenched) saving propensity of the agents, distributed widely between the agents ($0 \\le \\lambda < 1$). The system remarkably self-organizes to a critical Pareto distribution of money $P(m) \\sim m^{-(\\nu + 1)}$ with $\\nu \\simeq 1$. We analyse the robustness (universality) of the distribution in the model. We also argue that although the fractional saving ingredient is a bit unnatural one in the context of gas models, our model is the simplest so far, showing self-organized criticality, and combines two century-old distributions: Gibbs (1901) and Pareto (1897) distributions.",
  "revisions": [
    {
      "version": "v3",
      "updated": "2004-01-27T14:00:46.000Z"
    }
  ],
  "analyses": {
    "keywords": [
      "random saving propensity",
      "kinetic model",
      "pareto law",
      "system remarkably self-organizes",
      "century-old distributions"
    ],
    "tags": [
      "journal article"
    ],
    "note": {
      "typesetting": "RevTeX",
      "pages": 5,
      "language": "en",
      "license": "arXiv",
      "status": "editable"
    }
  }
}