Competition and Investment Model of Wealth Distribution
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arXiv
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| Format: | Preprint |
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2025
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| _version_ | 1866913841683628032 |
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| author | Ono, Yuri Ishida, Atsushi |
| author_facet | Ono, Yuri Ishida, Atsushi |
| contents | Explaining empirically observed wealth and income distributions, featuring power-law tails alongside gamma or log-normal bulk shapes, challenges models that focus on either pairwise competition or individual investment mechanisms. This study proposes and analyzes a unified model that integrates pairwise competition and individual investment via an adjustable parameter, $α$. Numerical simulations are conducted to analyze the model's Gini coefficient and distributional shapes using the complementary cumulative distribution function and goodness-of-fit tests. Results show that the model captures a systematic transition in the bulk distribution from gamma like (low $α$) to log-normal like (high $α$). Additionally, intermediate levels of mechanism mixing can reduce inequality compared with the original mechanisms. However, it is difficult to distinguish heavy tails consistent with power-laws from log-normal tails. These findings highlight the importance of considering the interaction between different economic mechanisms but suggest that accurately replicating the empirical power-law tail requires more than the simple combination investigated. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2505_10818 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | Competition and Investment Model of Wealth Distribution Ono, Yuri Ishida, Atsushi Physics and Society Explaining empirically observed wealth and income distributions, featuring power-law tails alongside gamma or log-normal bulk shapes, challenges models that focus on either pairwise competition or individual investment mechanisms. This study proposes and analyzes a unified model that integrates pairwise competition and individual investment via an adjustable parameter, $α$. Numerical simulations are conducted to analyze the model's Gini coefficient and distributional shapes using the complementary cumulative distribution function and goodness-of-fit tests. Results show that the model captures a systematic transition in the bulk distribution from gamma like (low $α$) to log-normal like (high $α$). Additionally, intermediate levels of mechanism mixing can reduce inequality compared with the original mechanisms. However, it is difficult to distinguish heavy tails consistent with power-laws from log-normal tails. These findings highlight the importance of considering the interaction between different economic mechanisms but suggest that accurately replicating the empirical power-law tail requires more than the simple combination investigated. |
| title | Competition and Investment Model of Wealth Distribution |
| topic | Physics and Society |
| url | https://arxiv.org/abs/2505.10818 |