Microeconomics of the ideal gas like market models

TL;DR

This paper develops a microeconomic framework for ideal gas-like market models, proposing a kinetic exchange model, analyzing its distributional properties, and extending it to include an output market with price determination.

Contribution

It introduces a novel microeconomic framework for ideal gas-like markets, derives moments of the proposed kinetic exchange model, and incorporates an output market with price setting.

Findings

Distributional features characterized by moments

Derived moments of the CC model match earlier solutions

Extended model includes a global price mechanism

Abstract

We develop a framework based on microeconomic theory from which the ideal gas like market models can be addressed. A kinetic exchange model based on that framework is proposed and its distributional features have been studied by considering its moments. Next, we derive the moments of the CC model (Eur. Phys. J. B 17 (2000) 167) as well. Some precise solutions are obtained which conform with the solutions obtained earlier. Finally, an output market is introduced with global price determination in the model with some necessary modifications.