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Wealth redistribution with conservative exchanges

Author

Listed:
  • Pianegonda, S
  • Iglesias, J.R
  • Abramson, G
  • Vega, J.L

Abstract

We present a simplified model for the exploitation of resources by interacting agents, where each agent receives a random fraction of the available resources. An extremal dynamics ensures that the poorest agent has a chance to change its economic welfare. After a long transient; the system self-organizes into a critical state that maximizes the average performance of each participant. Our model exhibits a new kind of wealth condensation, where very few extremely rich agents are stable in time and the rest stays in the middle class.

Suggested Citation

  • Pianegonda, S & Iglesias, J.R & Abramson, G & Vega, J.L, 2003. "Wealth redistribution with conservative exchanges," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 322(C), pages 667-675.
  • Handle: RePEc:eee:phsmap:v:322:y:2003:i:c:p:667-675 DOI: 10.1016/S0378-4371(02)01737-5
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    References listed on IDEAS

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    1. Galam, Serge & Zucker, Jean-Daniel, 2000. "From individual choice to group decision-making," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 287(3), pages 644-659.
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    Citations

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    Cited by:

    1. Zoltan Kuscsik & Denis Horvath, 2007. "Statistical properties of agent-based market area model," Papers 0710.0459, arXiv.org.
    2. Fuentes, Miguel A. & Kuperman, M. & Iglesias, J.R., 2006. "Living in an irrational society: Wealth distribution with correlations between risk and expected profits," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 371(1), pages 112-117.
    3. Hu, Feng-Rung, 2008. "On the estimation of the power-law exponent in the mean-field Bouchaud–Mézard model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 387(18), pages 4605-4614.
    4. J. R. Iglesias & R. M. C. de Almeida, 2011. "Entropy and equilibrium state of free market models," Papers 1108.5725, arXiv.org.
    5. Sebastian Guala, 2009. "Taxes in a Wealth Distribution Model by Inelastically Scattering of Particles," Interdisciplinary Description of Complex Systems - scientific journal, Croatian Interdisciplinary Society Provider Homepage: http://indecs.eu, vol. 7(1), pages 1-7.
    6. Sebastian D. Guala, 2008. "Taxes in a simple wealth distribution model by inelastically scattering particles," Papers 0807.4484, arXiv.org.
    7. Ausloos, Marcel & Pe¸kalski, Andrzej, 2007. "Model of wealth and goods dynamics in a closed market," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 373(C), pages 560-568.

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