simonerigoni / pareto_distribution_bet_game

Pareto distribution bet game

Pareto distribution bet game

Introduction

The Pareto distribution is a probability distribution that is often used to describe the distribution of wealth in a population. It is also known as the 80/20 rule, as it states that 80% of the outcome are due to 20% of the causes. The goal is to simulate this experiment that Dr Jordan B Peterson uses to teach his students about the Pareto principle.

Software and Libraries

This project uses Python 3.9.2 and the following libraries:

• Pandas
• Numpy
• matplotlib

Running the code

The code is provided in the form of a Jupyter Notebook bet_game.ipynb

Results

We have been able to simulate the experiment and the results are as expected. At the beginning the distribution of money is uniform between the players:

After a betting cycle the distribution of money is pretty unequal and a lot of players have 0 money

Just for fun now let's apply a tax to the rich players and redistribute some money to the broke players:

End if we run again a betting cycle

We can also check the evolution of every palyer moneys:

You can find more information in this blog post

Acknowledgements

Thanks Dr Jordan B Peterson for the wonderful lectures and the idea of this experiment.