Physical Models in Social Contexts: Wealth redistribution mechanisms

Abstract

In this paper we present simulation results for multi-agent models of economic systems. We interpret the stationary distributions of wealth and focus on measuring their inequality with the Gini coeficient. We introduce saving propensity of the agents both global and individual. In the first case, we find that inequality decreases with an increasing saving propensity and that the distribution of wealth evolves to a gamma distribution. An analogy is then made with the kinetic theory model and its equilibrium Maxwell-Boltzmann distribution. In the second case, the equilibrium distribution is found to have an incipient power-law tail. We also add a redistribution of wealth mechanism based on taxes and evaluate the reduction of wealth inequality that it entails. Last, we study a model with dynamic saving propensity rates and a mechanism that rewards those trades in which significant wealth is brought into play