Entropy Geometry and Condensation in Wealth Allocation
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arXiv
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| Format: | Preprint |
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2026
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| author | Biswas, Korak |
| author_facet | Biswas, Korak |
| contents | We develop a statistical framework for wealth allocation in which agents hold discrete units of wealth and macrostates are defined by how wealth is distributed across agents. The structure of the economic state space is characterized through a value convertibility function, which captures how effectively additional wealth can be transformed into productive or meaningful value. The derivative of this function determines the effective number of internally distinct configurations available to an agent at a given wealth level. In a closed setting with fixed total wealth and a fixed number of agents, we show that equilibrium wealth distributions follow directly from unbiased counting of admissible configurations and may display a condensation phenomenon, where a finite fraction of total wealth accumulates onto a single agent once the remaining agents can no longer absorb additional wealth. We then extend the framework to open systems in which both total wealth and the number of agents may vary. By embedding the system within a larger closed environment and analyzing a finite subsystem, we show that exponential weighting in wealth and agent number emerges naturally from counting arguments alone, without invoking explicit optimization or entropy maximization principles. This extension leads to a richer interpretation of wealth concentration: accumulation is no longer driven solely by excess wealth, but by a balance between wealth growth and the system's capacity to accommodate new agents. Condensation arises when this capacity is limited, forcing surplus wealth to concentrate onto a few agents. The framework thus provides a minimal and structurally grounded description of wealth concentration in both closed and open economic settings. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2602_03676 |
| institution | arXiv |
| publishDate | 2026 |
| record_format | arxiv |
| spellingShingle | Entropy Geometry and Condensation in Wealth Allocation Biswas, Korak Physics and Society Statistical Mechanics We develop a statistical framework for wealth allocation in which agents hold discrete units of wealth and macrostates are defined by how wealth is distributed across agents. The structure of the economic state space is characterized through a value convertibility function, which captures how effectively additional wealth can be transformed into productive or meaningful value. The derivative of this function determines the effective number of internally distinct configurations available to an agent at a given wealth level. In a closed setting with fixed total wealth and a fixed number of agents, we show that equilibrium wealth distributions follow directly from unbiased counting of admissible configurations and may display a condensation phenomenon, where a finite fraction of total wealth accumulates onto a single agent once the remaining agents can no longer absorb additional wealth. We then extend the framework to open systems in which both total wealth and the number of agents may vary. By embedding the system within a larger closed environment and analyzing a finite subsystem, we show that exponential weighting in wealth and agent number emerges naturally from counting arguments alone, without invoking explicit optimization or entropy maximization principles. This extension leads to a richer interpretation of wealth concentration: accumulation is no longer driven solely by excess wealth, but by a balance between wealth growth and the system's capacity to accommodate new agents. Condensation arises when this capacity is limited, forcing surplus wealth to concentrate onto a few agents. The framework thus provides a minimal and structurally grounded description of wealth concentration in both closed and open economic settings. |
| title | Entropy Geometry and Condensation in Wealth Allocation |
| topic | Physics and Society Statistical Mechanics |
| url | https://arxiv.org/abs/2602.03676 |