Understanding the distributions of income and wealth in an economy has been a classic problem in economics for more than a hundred years.
Considerable investigations with the real data during the last fifteen years (1995–2010) revealed[1] that the tail (typically 5 to 10 percent of agents in any country) of the income/wealth distribution indeed follows a power law.
[5][6] Later, scholars found that in 1988, Bennati had independently introduced the same kinetic exchange dynamics, thus leading to the nomenclature of this model as Bennati-Dragulescu-Yakovenko (BDY) game.
[7] The main modelling efforts since then have been put to introduce the concepts of savings,[8][9] and taxation[10] in the setting of an ideal gas-like system.
Recently it has been shown [13] that an extension of the Cobb-Douglas utility function (in the above-mentioned Chakrabarti-Chakrabarti formulation) by adding a production savings factor leads to the desired feature of growth of the economy in conformity with some earlier phenomenologically established growth laws in the economics literature.
[7] A very simple model, based on the same kinetic exchange framework, was introduced by Chakraborti in 2002,[16] now popularly called the "yard sale model",[17] because it had few features of a real one-on-one economic transactions which led to an oligarchy; this has been extensively studied and reviewed by Boghosian.