On Pareto theory of circulation of elites
Ricardo P\'erez-Marco
TL;DR
This paper connects Pareto's theory of elite circulation with a wealth evolution model, optimal betting strategies, and psychological factors influencing economic risk-taking, providing a theoretical foundation for elite dynamics.
Contribution
It introduces a novel integration of wealth dynamics, betting strategies, and behavioral economics to explain elite circulation.
Findings
Pareto theory emerges from wealth and risk models
Optimal betting influences wealth distribution dynamics
Psychological factors drive economic risk-taking behaviors
Abstract
We prove that Pareto theory of circulation of elites results from our wealth evolution model, Kelly criterion for optimal betting and Keynes' observation of "animal spirits" that drive the economy and cause that human financial decisions are prone to excess risk-taking.
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Taxonomy
TopicsElite Sociology and Global Capitalism