Gamma-distribution and wealth inequality

We discuss the equivalence between kinetic wealth-exchange models, in which agents exchange wealth during trades, and mechanical models of particles, exchanging energy during collisions. The universality of the underlying dynamics is shown both through a variational approach based on the minimization of the Boltzmann entropy and a complementary microscopic analysis of the collision dynamics of molecules in a gas. In various relevant cases the equilibrium distribution is the same for all these models, namely a gamma-distribution with suitably defined temperature and number of dimensions. This in turn allows one to quantify the inequalities observed in the wealth distributions and suggests that their origin should be traced back to very general underlying mechanisms: for instance, it follows that the smaller the fraction of the relevant quantity (e.g. wealth or energy) that agents can exchange during an interaction, the closer the corresponding equilibrium distribution is to a fair distribution.Comment: Presented to the International Workshop and Conference on: Statistical Physics Approaches to Multi-disciplinary Problems, January 07-13, 2008, IIT Guwahati, Indi

Adaptive networks of trading agents

Multi-agent models have been used in many contexts to study generic collective behavior. Similarly, complex networks have become very popular because of the diversity of growth rules giving rise to scale-free behavior. Here we study adaptive networks where the agents trade ``wealth'' when they are linked together while links can appear and disappear according to the wealth of the corresponding agents; thus the agents influence the network dynamics and vice-versa. Our framework generalizes a multi-agent model of Bouchand and Mezard, and leads to a steady state with fluctuating connectivities. The system spontaneously self-organizes into a critical state where the wealth distribution has a fat tail and the network is scale-free; in addition, network heterogeneities lead to enhanced wealth condensation.Comment: 7 figure

Reshuffling spins with short range interactions: When sociophysics produces physical results

Galam reshuffling introduced in opinion dynamics models is investigated under the nearest neighbor Ising model on a square lattice using Monte Carlo simulations. While the corresponding Galam analytical critical temperature T_C \approx 3.09 [J/k_B] is recovered almost exactly, it is proved to be different from both values, not reshuffled (T_C=2/arcsinh(1) \approx 2.27 [J/k_B]) and mean-field (T_C=4 [J/k_B]). On this basis, gradual reshuffling is studied as function of 0 \leq p \leq 1 where p measures the probability of spin reshuffling after each Monte Carlo step. The variation of T_C as function of p is obtained and exhibits a non-linear behavior. The simplest Solomon network realization is noted to reproduce Galam p=1 result. Similarly to the critical temperature, critical exponents are found to differ from both, the classical Ising case and the mean-field values.Comment: 11 pages, 5 figures in 6 eps files, to appear in IJMP

Blockbusters, Bombs and Sleepers: The income distribution of movies

The distribution of gross earnings of movies released each year show a distribution having a power-law tail with Pareto exponent $\alpha \simeq 2$. While this offers interesting parallels with income distributions of individuals, it is also clear that it cannot be explained by simple asset exchange models, as movies do not interact with each other directly. In fact, movies (because of the large quantity of data available on their earnings) provide the best entry-point for studying the dynamics of how ``a hit is born'' and the resulting distribution of popularity (of products or ideas). In this paper, we show evidence of Pareto law for movie income, as well as, an analysis of the time-evolution of income.Comment: 5 pages, 3 figures, to appear in Proceedings of International Workshop on Econophysics of Wealth Distributions (Econophys-Kolkata I), March 15-19, 200

Living in an Irrational Society: Wealth Distribution with Correlations between Risk and Expected Profits

Different models to study the wealth distribution in an artificial society have considered a transactional dynamics as the driving force. Those models include a risk aversion factor, but also a finite probability of favoring the poorer agent in a transaction. Here we study the case where the partners in the transaction have a previous knowledge of the winning probability and adjust their risk aversion taking this information into consideration. The results indicate that a relatively equalitarian society is obtained when the agents risk in direct proportion to their winning probabilities. However, it is the opposite case that delivers wealth distribution curves and Gini indices closer to empirical data. This indicates that, at least for this very simple model, either agents have no knowledge of their winning probabilities, either they exhibit an ``irrational'' behavior risking more than reasonable.Comment: 7 pages, 8 figure

Power-Law Distributions in Circulating Money: Effect of Preferential Behavior

We introduce preferential behavior into the study on statistical mechanics of money circulation. The computer simulation results show that the preferential behavior can lead to power laws on distributions over both holding time and amount of money held by agents. However, some constraints are needed in generation mechanism to ensure the robustness of power-law distributions.Comment: 4 pages, 2 figure

Universal scaling in sports ranking

Ranking is a ubiquitous phenomenon in the human society. By clicking the web pages of Forbes, you may find all kinds of rankings, such as world's most powerful people, world's richest people, top-paid tennis stars, and so on and so forth. Herewith, we study a specific kind, sports ranking systems in which players' scores and prize money are calculated based on their performances in attending various tournaments. A typical example is tennis. It is found that the distributions of both scores and prize money follow universal power laws, with exponents nearly identical for most sports fields. In order to understand the origin of this universal scaling we focus on the tennis ranking systems. By checking the data we find that, for any pair of players, the probability that the higher-ranked player will top the lower-ranked opponent is proportional to the rank difference between the pair. Such a dependence can be well fitted to a sigmoidal function. By using this feature, we propose a simple toy model which can simulate the competition of players in different tournaments. The simulations yield results consistent with the empirical findings. Extensive studies indicate the model is robust with respect to the modifications of the minor parts.Comment: 8 pages, 7 figure

Bidding process in online auctions and winning strategy:rate equation approach

Online auctions have expanded rapidly over the last decade and have become a fascinating new type of business or commercial transaction in this digital era. Here we introduce a master equation for the bidding process that takes place in online auctions. We find that the number of distinct bidders who bid $k$ times, called the $k$-frequent bidder, up to the $t$-th bidding progresses as $n_k(t)\sim tk^{-2.4}$. The successfully transmitted bidding rate by the $k$-frequent bidder is obtained as $q_k(t) \sim k^{-1.4}$, independent of $t$ for large $t$. This theoretical prediction is in agreement with empirical data. These results imply that bidding at the last moment is a rational and effective strategy to win in an eBay auction.Comment: 4 pages, 6 figure

Power-law distributions from additive preferential redistributions

We introduce a non-growth model that generates the power-law distribution with the Zipf exponent. There are N elements, each of which is characterized by a quantity, and at each time step these quantities are redistributed through binary random interactions with a simple additive preferential rule, while the sum of quantities is conserved. The situation described by this model is similar to those of closed $N$-particle systems when conservative two-body collisions are only allowed. We obtain stationary distributions of these quantities both analytically and numerically while varying parameters of the model, and find that the model exhibits the scaling behavior for some parameter ranges. Unlike well-known growth models, this alternative mechanism generates the power-law distribution when the growth is not expected and the dynamics of the system is based on interactions between elements. This model can be applied to some examples such as personal wealths, city sizes, and the generation of scale-free networks when only rewiring is allowed.Comment: 12 pages, 4 figures; Changed some expressions and notations; Added more explanations and changed the order of presentation in Sec.III while results are the sam

Predicted and Verified Deviations from Zipf's law in Ecology of Competing Products

Zipf's power-law distribution is a generic empirical statistical regularity found in many complex systems. However, rather than universality with a single power-law exponent (equal to 1 for Zipf's law), there are many reported deviations that remain unexplained. A recently developed theory finds that the interplay between (i) one of the most universal ingredients, namely stochastic proportional growth, and (ii) birth and death processes, leads to a generic power-law distribution with an exponent that depends on the characteristics of each ingredient. Here, we report the first complete empirical test of the theory and its application, based on the empirical analysis of the dynamics of market shares in the product market. We estimate directly the average growth rate of market shares and its standard deviation, the birth rates and the "death" (hazard) rate of products. We find that temporal variations and product differences of the observed power-law exponents can be fully captured by the theory with no adjustable parameters. Our results can be generalized to many systems for which the statistical properties revealed by power law exponents are directly linked to the underlying generating mechanism