Wealth Distribution in a Network with Correlations between Links and Success

RISAU GUSMAN, SEBASTIAN; LAGUNA, MARIA F.; IGLESIAS, JOSE R.

Kolkata, India

Workshop; International Workshop on Econophysics of Wealth Distributions (ECONOPHYS - KOLKATA I); 2005

Saha Institute of Nuclear Physics

Different models of capital exchange among economic agents have been recently proposed that try to explain the emergence of Pareto´s power law distribution of wealth. Most of these models consider the existence of risk aversion and also a probability that the poorer agent be somehow favored in each exchange. Here we add the hypothesis that the agents connectivity is not only strongly related to its wealth but also to its success. So, starting from agents placed on a random lattice (i. e. with a possonian distribution of links), an agent with success in its economic transactions will receive the expected monetary reward, but it will also increrase its connectivity at the expense of other agents (so that the total connectivity remains constant). When the system arrives to a stationary state, it is observed that the wealth distribution has been modified by the dynamics of the lattice, getting closer to a power law for some values of the parameters of the model. As expected, the lattice itself is different from the rtandom initial one. The Gini coefficients show that the reconnection of the lattice induces a kind of ´protective screening´ of less favored agents, rtesulting in a distribution of wealth less unequal than on a static network for some of the values of the parameters.