2025/05/16 by Ono, Yuri, Atsushi Ishida, Ishida, Atsushi
Economics, Econometrics and Finance · #Complex Systems and Time Series Analysis #Economic Growth and Productivity #Economic and Technological Innovation #FOS: Physical sciences #Physics and Society (physics.soc-ph)
paper · pdf · doi:10.48550/arxiv.2505.10818
openalex publication_date 2025/05/16 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/28
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.