The 80-20 Rule Explained (Pareto Principle)

Math
The 80/20 rule or Pareto principle comes up a lot in economics and business. But why does this pattern emerge? I show why using a paper clip experiment.

Note: VSauce later made a video about Zipf’s law that uses this same experiment but does the math incorrectly. The long tail should be for the single chain of long length.

Income distribution graph by vikjam (CC BY-SA 3.0)
http://en.wikipedia.org/wiki/File:Distribution_of_Annual_Household_Income_in_the_United_States_2012.png#filelinks

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