Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/315194 
Year of Publication: 
2025
Series/Report no.: 
ifso working paper No. 50
Publisher: 
University of Duisburg-Essen, Institute for Socio-Economics (ifso), Duisburg
Abstract: 
Power law distributions are ubiquitous in socioeconomic contexts. While their general properties are well understood, it is often less clear why they regularly appear in empirical data. What are the generative mechanisms leading to power laws, how do they arise in the real world? This paper aims to partly fill this gap by discussing two candidate mechanisms that appear especially relevant for understanding the emergence of power laws in socioeconomic contexts. We identify core formal properties and potential real-world equivalents of these mechanisms. In addition, we explore the relation of power laws to indirectly related concepts relevant in heterodox economics, like path dependence, cumulative effects, power asymmetries or non-ergodicity.
Subjects: 
power law distributions
inequality
generative mechanisms
wealth inequality
firm size
JEL: 
B52
D00
D30
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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