This paper by Didier Sornette and Rama Cont explores the behavior of random multiplicative processes that are repelled from zero, leading to power law and truncated power law distributions. The authors provide a derivation based on a random walk analogy and discuss the conditions under which these power laws emerge. They also relate these processes to Kesten variables and discuss the implications for various models, including those in population dynamics and financial time series. The paper includes mathematical derivations and comparisons with existing theories.
documents/EFTA01147164.pdf
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