Experimental evidence for the interplay between individual wealth and transaction network

TL;DR

This study uses a long-term market experiment with human participants to analyze how transaction network structures influence wealth distribution, revealing scale-free networks and a power-law relationship between wealth and network degree.

Contribution

It provides empirical evidence linking transaction network topology with wealth accumulation dynamics, highlighting the scale-free nature and degree-wealth correlation.

Findings

Transaction networks are scale-free and disassortative.

Wealth distribution follows a hybrid log-normal and power-law pattern.

We establish a power-law relation between wealth and network degree.

Abstract

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.