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Model of wealth and goods dynamics in a closed market

  • Ausloos, Marcel
  • Pe¸kalski, Andrzej

A simple computer simulation model of a closed market on a fixed network with free flow of goods and money is introduced. The model contains only two variables: the amount of goods and money beside the size of the system. An initially flat distribution of both variables is presupposed. We show that under completely random rules, i.e. through the choice of interacting agent pairs on the network and of the exchange rules that the market stabilizes in time and shows diversification of money and goods. We also indicate that the difference between poor and rich agents increases for small markets, as well as for systems in which money is steadily deduced from the market through taxation. It is also found that the price of goods decreases when taxes are introduced, likely due to the less availability of money.

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File URL: http://www.sciencedirect.com/science/article/pii/S0378437106004833
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Article provided by Elsevier in its journal Physica A: Statistical Mechanics and its Applications.

Volume (Year): 373 (2007)
Issue (Month): C ()
Pages: 560-568

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Handle: RePEc:eee:phsmap:v:373:y:2007:i:c:p:560-568
DOI: 10.1016/j.physa.2006.04.112
Contact details of provider: Web page: http://www.journals.elsevier.com/physica-a-statistical-mechpplications/

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  1. Manolova, Petia & Lai Tong, Charles & Deissenberg, Christophe, 2003. "Money and exchange in an economy with spatially differentiated agents," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 324(1), pages 445-453.
  2. Anirban Chakraborti & Bikas K. Chakrabarti, 2000. "Statistical mechanics of money: How saving propensity affects its distribution," Papers cond-mat/0004256, arXiv.org, revised Jun 2000.
  3. Arnab Das & Sudhakar Yarlagadda, 2003. "Analytic treatment of a trading market model," Papers cond-mat/0304685, arXiv.org.
  4. Stéphane Hallegatte, 2006. "A Cost-Benefit Analysis of the New Orleans Flood Protection System," Post-Print hal-00164628, HAL.
  5. Iglesias, J.R. & Gonçalves, S. & Pianegonda, S. & Vega, J.L. & Abramson, G., 2003. "Wealth redistribution in our small world," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 327(1), pages 12-17.
  6. 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.
  7. Ausloos, Marcel & Vandewalle, N. & Ivanova, K., 2000. "Time is money," MPRA Paper 28703, University Library of Munich, Germany.
  8. A. Chakraborti & B.K. Chakrabarti, 2000. "Statistical mechanics of money: how saving propensity affects its distribution," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 17(1), pages 167-170, September.
  9. Donangelo, R & Sneppen, K, 2002. "Cooperativity in a trading model with memory and production," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 316(1), pages 581-591.
  10. Chatterjee, Arnab & K. Chakrabarti, Bikas & Manna, S.S, 2004. "Pareto law in a kinetic model of market with random saving propensity," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 335(1), pages 155-163.
  11. Patriarca, Marco & Chakraborti, Anirban & Kaski, Kimmo, 2004. "Gibbs versus non-Gibbs distributions in money dynamics," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 340(1), pages 334-339.
  12. Repetowicz, Przemysław & Hutzler, Stefan & Richmond, Peter, 2005. "Dynamics of money and income distributions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 356(2), pages 641-654.
  13. Arnab Chatterjee & Bikas K. Chakrabarti & S. S. Manna, 2003. "Pareto Law in a Kinetic Model of Market with Random Saving Propensity," Papers cond-mat/0301289, arXiv.org, revised Jan 2004.
  14. Przemyslaw Repetowicz & Stefan Hutzler & Peter Richmond, 2004. "Dynamics of Money and Income Distributions," Papers cond-mat/0407770, arXiv.org.
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