But I can come up with an infinite number of models that generate extreme inequality. Here’s one:

Flip a coin. Comes up heads, all wealth ends up with DontManuel. Comes up tails, nothing happens. Repeat until all wealth ends up with DontManuel.

The question is whether this model mimics reality in any way. Is there any reason to believe actual economic processes operate in this way or generate inequality in this way?

The problem isn’t even that it’s unrealistic. The problem is that the rules of this Yard Sale Model are so painfully contrived to generate extreme inequality that it doesn’t actually even yield any insight into anything. Of course if you make trade 1) random; 2) not mutually beneficial; and 3) trade is done as a fraction of wealth, then eventually some end up with everything.

Perhaps there’s some analogy here to entrepreneurship in select zero-sum contexts, where there can only be a few winners, past winners are more likely to win again, and most people lose. But then I have no idea why this is called the “Yard Sale” model.