On a kinetic model for a simple market economy

Stephane Cordier, Lorenzo Pareschi and Giuseppe Toscani
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Stephane Cordier: MAPMO

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Abstract: In this paper, we consider a simple kinetic model of economy involving both exchanges between agents and speculative trading. We show that the kinetic model admits non trivial quasi-stationary states with power law tails of Pareto type. In order to do this we consider a suitable asymptotic limit of the model yielding a Fokker-Planck equation for the distribution of wealth among individuals. For this equation the stationary state can be easily derived and shows a Pareto power law tail. Numerical results confirm the previous analysis.

Date: 2004-12
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:math/0412429

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