Modelling savings behavior of agents in the kinetic exchange models of market

TL;DR

This paper explores the savings behavior of agents within kinetic exchange models, introducing new insights and connecting these models with reinforcement and strategic choice frameworks to better understand income distribution.

Contribution

It presents novel models of agent savings behavior, bridging kinetic exchange models with reinforcement and strategic choice theories, expanding their explanatory power.

Findings

Derived new results on savings behavior

Connected reinforcement choice with kinetic exchange models

Confirmed consistency with previous findings

Abstract

Kinetic exchange models have been successful in explaining the shape of the income/wealth distribution in the economies. However, such models usually make some ad-hoc assumptions when it comes to determining the savings factor. Here, we examine a few models in and out of the domain of standard neo-classical economics to explain the savings behavior of the agents. A number of new results are derived and the rest conform with those obtained earlier. Connections are established between the reinforcement choice and strategic choice models with the usual kinetic exchange models.