Physical Picture of the Insurance Market
arXiv:cond-mat/0404680
Abstract
We find the wealth distribution for an economic agent in the financial market, in analogy with standard derivation of generaliz Boltzman (Tsallis) factor in statistical mechanics. In this respect, Tsallis entropic index separates two different regimes, the large and small size market. The Pareto like wealth distribution is obtained in the case of small size market. A method for computing the premium is suggested based on the surplus average vanishing.
3 page