Oligarchy as a phase transition: the effect of wealth-attained advantage in a Fokker-Planck description of asset exchange
From MaRDI portal
(Redirected from Publication:2145192)
Abstract: In earlier work, we derived a nonlinear, nonlocal Fokker-Planck equation for the Yard-Sale Model of asset exchange. In the absence of redistribution, we showed that the Gini coefficient is a Lyapunov functional for this model, tending to one in the time-asymptotic limit, corresponding to maximal inequality. When a one-parameter model of redistribution is introduced, we showed that the model admits a steady state similar to Pareto's Law. In this work, we analyze the form of this distribution in greater detail, both analytically and numerically. We find that, while Pareto's Law is approximately valid for low redistribution, it gives way to something like Gibrat's Law at higher redistribution. We also prove that, while this Pareto or Gibrat behavior persists over many orders of magnitude, it ultimately gives way to gaussian decay at extremely large wealth. Following the work of Moukarzel et al., we introduce a bias in favor of the wealthier agent. We derive the corresponding modification to the Fokker-Planck equation, and we show this leads to wealth condensation when the bias exceeds a critical value. Earlier work took the bias to be a discontinuous function of the wealth differential between the two transacting agents, and reported a first-order phase transition to absolute oligarchy. By contrast, in this work we take the bias to be a continuous function of the wealth differential, and consequently we observe a second-order phase transition with a region of coexistence between the oligarch and a distribution of non-oligarchs. We additionally show that the onset of wealth condensation has a reciprocal effect on the character of the non-oligarchical part of the distribution. Specifically, we show that the above-mentioned gaussian decay at extremely large wealth is valid both above and below criticality, but degenerates to exponential decay precisely at criticality.
Recommendations
- Investigations to the dynamics of wealth distribution in a kinetic exchange model
- The lattice Fokker-Planck equation for models of wealth distribution
- The emergence and persistence of oligarchy: a dynamic model of endogenous political power
- On a Fokker-Planck equation for wealth distribution
- Wealth distribution and collective knowledge: a Boltzmann approach
- Ergodic chaos and aggregate stability: a deterministic discrete-choice model of wealth distribution dynamics
- The nonuniversality of wealth distribution tails near wealth condensation criticality
- Wealth distribution in presence of debts: a Fokker-Planck description
Cites work
- A kinetic view of statistical physics
- An H theorem for Boltzmann's equation for the yard-sale model of asset exchange. The Gini coefficient as an H functional
- Exponential and power-law probability distributions of wealth and income in the United Kingdom and the United States
- Fokker-Planck Equation for an Inverse-Square Force
Cited in
(27)- Wealth redistribution with conservative exchanges
- Wealth concentration in systems with unbiased binary exchanges
- Nonlinear redistribution of wealth from a stochastic approach
- Duality in an asset exchange model for wealth distribution
- A kinetic description of individual wealth growth and control
- The affine wealth model: an agent-based model of asset exchange that allows for negative-wealth agents and its empirical validation
- Investigations to the dynamics of wealth distribution in a kinetic exchange model
- Numerical solution of the Fokker-Planck equation using physics-based mixture models
- A simple probabilistic approach of the yard-sale model
- Yard-sale exchange on networks: wealth sharing and wealth appropriation
- Condensation phenomena and Pareto distribution in disordered urn models
- A nonstandard description of wealth concentration in large-scale economies
- Stochastic Maps, Wealth Distribution in Random Asset Exchange Models and the Marginal Utility of Relative Wealth
- The nonuniversality of wealth distribution tails near wealth condensation criticality
- The lattice Fokker-Planck equation for models of wealth distribution
- Wealth condensation and ``corruption in a toy model
- Phase transition in the rich-get-richer mechanism due to finite-size effects
- Derivation of wealth distributions from biased exchange of money
- Explicit decay rate for the Gini index in the repeated averaging model
- Bounding the approach to oligarchy in a variant of the yard-sale model
- Kinetic modeling of wealth distribution under individual and collective transactions with heterogeneous saving propensities
- Inequality measures in wealth exchange models based on saving propensity
- Adaptive normalizing flows for solving Fokker-Planck equation
- A biased dollar exchange model involving bank and debt with discontinuous equilibrium
- H-theorem at negative temperature: the random exchange model with bounds
- A gradient flow perspective on McKean-Vlasov equations in econophysics
- Wealth thermalization hypothesis and social networks
This page was built for publication: Oligarchy as a phase transition: the effect of wealth-attained advantage in a Fokker-Planck description of asset exchange
Report a bug (only for logged in users!)Click here to report a bug for this page (MaRDI item Q2145192)
