On the origins of extreme wealth inequality in the Talent vs Luck Model

Damien Challet, Alessandro Pluchino, Alessio Emanuele Biondo and Andrea Rapisarda
Additional contact information
Alessandro Pluchino: Unict - Università degli studi di Catania = University of Catania
Alessio Emanuele Biondo: Unict - Università degli studi di Catania = University of Catania
Andrea Rapisarda: Unict - Università degli studi di Catania = University of Catania

Post-Print from HAL

Abstract: We introduce a simplified version (STvL) of the Talent versus Luck (TvL) model where only lucky events are present and verify that its dynamical rules lead to the same very large wealth inequality as the original model. We also derive some analytical approximations aimed to capture the mechanism responsible for the creation of such wealth inequality from a Gaussian-distributed talent. Under these approximations, our analysis is able to reproduce quite well the results of the numerical simulations of the simplified model. On the other hand, it also shows that the complexity of the model lies in the stochastic transformation of lucky events into an increase of capital, so that, when the talent heterogeneity of the population increases, the task of finding a formal analytical relationship between the distributions of capital, talent and luck in either the TvL or the STvL models becomes very hard.

Date: 2020-06-03
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Published in Advances in Complex Systems (ACS), 2020, 23 (02), pp.2050004. ⟨10.1142/S0219525920500046⟩

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:journl:hal-02188240

DOI: 10.1142/S0219525920500046

Access Statistics for this paper

More papers in Post-Print from HAL
Bibliographic data for series maintained by CCSD ().