The impact of randomness on the distribution of wealth: Some economic aspects of the Wright-Fisher diffusion process

Nicolas Bouleau () and Christophe Chorro ()
Additional contact information
Nicolas Bouleau: CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École nationale des ponts et chaussées - CNRS - Centre National de la Recherche Scientifique
Christophe Chorro: CES - Centre d'économie de la Sorbonne - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique

Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL

Abstract: In this paper we consider some elementary and fair zero-sum games of chance to study the impact of random effects on the wealth distribution of N interacting players. Even if an exhaustive analytical study of such games between many players may be tricky, numerical experiments highlight interesting asymptotic properties, in particular, we underscore that randomness plays a key role in concentrating the wealth to the extreme with a single player. From a mathematical perspective, we interestingly recover for small and high-frequency transactions some diffusion limits extensively used in population genetics. Finally, the impact of small tax rates on the preceding dynamics is discussed for several regulation mechanisms. We show that taxation of income is not sufficient to overcome the externe concentration process contrary to a uniform taxation of capital that stabilizes the economy preventing agents to be ruined.

Keywords: Wealth distribution; Fair zero-sum games; Wright-Fisher diffusions; Inequalities; Impact of modes of taxation (search for similar items in EconPapers)
Date: 2015-07
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01162452v2
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Published in 2015

Downloads: (external link)
https://shs.hal.science/halshs-01162452v2/document (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hal:cesptp:halshs-01162452

Access Statistics for this paper

More papers in Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) from HAL
Bibliographic data for series maintained by CCSD ().