Modelling Inequality

Econophysics is a new and exciting cross-disciplinary research field that applies models and modeling techniques from statistical physics to economic systems. It is not, however, without its critics: prominent figures in more mainstream economic theory have criticized some elements of the methodology of econophysics. One of the main lines of criticism concerns the nature of the modeling assumptions and idealizations involved, and a particular target is 'kinetic exchange' approaches used to model the emergence of inequality within the distribution of individual monetary income. This paper will consider such models in detail and assess the warrant of the criticisms, drawing upon the philosophical literature on modeling and idealization. Our aim is to provide the first steps towards informed mediation of this important and interesting interdisciplinary debate, and our hope is to offer guidance with regard to both the practice of modeling inequality and the inequality of modeling practice.