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Posts about Yard Sale Theory (RSS, JSON)

Friday, 23 December 2022

— The Yard Sale Theory tries to understand why wealth is so unevenly distributed these days. Wealthier people have more leverage to place bets, on the stock or property markets, for example, so they’re more likely to win big and find it easier to cover their losses. The Pudding explains the theory in a series of visualised experiments.

I came across a rare scenario where the poor person wins all the money when they have an early winning streak allowing them to accumulate wealth.

Two graphs showing the wealth distribution of the two subjects in the Yard Sale Theory. In this scenario the poor person's chart points upwards, accumulated wealth over time

I ran the same experiment a couple more times, and, as expected, the richer always got richer.