Power law distribution of wealth in population based on a modified Equíluz-Zimmermann model

Yan Bo Xie, Bing Hong Wang, Bo Hu, Tao Zhou

Research output: Contribution to journalArticlepeer-review

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Abstract

We propose a money-based model for the power law distribution (PLD) of wealth in an economically interacting population. It is introduced as a modification of the Equíluz and Zimmermann (EZ) model for crowding and information transmission in financial markets. Still, it must be stressed that in the EZ model a PLD without exponential correction is obtained only for a particular parameter, while our pattern will give the exact PLD within a wide range. The PLD exponent depends on the model parameters in a nontrivial way and is exactly calculated in this paper. The numerical results are in excellent agreement with the analytic prediction, and also comparable with empirical data of wealth distribution.

Original languageEnglish
Article number046135
JournalPhysical Review E - Statistical, Nonlinear, and Soft Matter Physics
Volume71
Issue number4
DOIs
StatePublished - Apr 2005
Externally publishedYes

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