Ideal-gas-like market models with savings: quenched and annealed cases

Abstract

We analyze the ideal-gas-like models of markets and review the different cases where a 'savings' factor changes the nature and shape of the distribution of wealth. These models can produce similar distribution of wealth as observed across varied economies. We present a more realistic model where the saving factor can vary over time (annealed savings) and yet produce Pareto distribution of wealth in certain cases. We discuss the relevance of such models in the context of wealth distribution, and address some recent issues in the context of these models.