2 research outputs found
Experimental evidence for the interplay between individual wealth and transaction network
We conduct a market experiment with human agents in order to explore the
structure of transaction networks and to study the dynamics of wealth
accumulation. The experiment is carried out on our platform for 97 days with
2,095 effective participants and 16,936 times of transactions. From these data,
the hybrid distribution (log-normal bulk and power-law tail) in the wealth is
observed and we demonstrate that the transaction networks in our market are
always scale-free and disassortative even for those with the size of the order
of few hundred. We further discover that the individual wealth is correlated
with its degree by a power-law function which allows us to relate the exponent
of the transaction network degree distribution to the Pareto index in wealth
distribution.Comment: 6 pages, 7 figure
Entropy and equilibrium state of free market models
Many recent models of trade dynamics use the simple idea of wealth exchanges
among economic agents in order to obtain a stable or equilibrium distribution
of wealth among the agents. In particular, a plain analogy compares the wealth
in a society with the energy in a physical system, and the trade between agents
to the energy exchange between molecules during collisions. In physical
systems, the energy exchange among molecules leads to a state of equipartition
of the energy and to an equilibrium situation where the entropy is a maximum.
On the other hand, in the majority of exchange models, the system converges to
a very unequal condensed state, where one or a few agents concentrate all the
wealth of the society while the wide majority of agents shares zero or almost
zero fraction of the wealth. So, in those economic systems a minimum entropy
state is attained. We propose here an analytical model where we investigate the
effects of a particular class of economic exchanges that minimize the entropy.
By solving the model we discuss the conditions that can drive the system to a
state of minimum entropy, as well as the mechanisms to recover a kind of
equipartition of wealth