What a great piece of work by these physicists. Thanks for posting this, Claudio.
Here's what I got out of it -- from the following paragraph. [begin excerpt] Bouchaud and Mezard formulated a set of equations that could follow wealth as it shifts from person to person, and as each person makes random gains or losses from his or her investments. They also included one further feature to reflect how the value of wealth is relative. A poor single parent might face near-ruin over the loss of a £20 note; in contrast, a very rich person wouldn't flinch after losing a few thousand. In other words, the value of a little more or less wealth depends on how much one already has. This implies that when it comes to investing, wealthy people will tend to invest proportionally more than the less wealthy. [end excerpt] People who want to make the leap have to suck it up and not flinch so much (and I mean that in the nicest way). There is a propensity that I did NOT see covered in their analysis (maybe it's covered in a more in-depth coverage, but not here), and that is the propensity to clutch at what one has and not risk it. The people who clutch the most gain the least -- that's the way I read this study. The lesson is to very tightly draw your circle around your needful things, and gamble the rest in the best way you can. Having lots of "stuff" is the padded cell that a huge number of people are willing to settle for. I would love to see that study run with a variable on the propensities to risk or clutch. One effect of income redistribution is to take money from risktakers and give it to hoarders, where it disappears into a dead end economically speaking. from Claudio's post: > Mark Buchanan's Small World: uncovering nature's hidden networks is > published by Weidenfeld & Nicolson (£18.99)
