Stratified economic exchange on networks

TL;DR

This paper models stratified economic interactions on networks, revealing how local wealth differences and network topology influence wealth distribution patterns and inequality states.

Contribution

It introduces a network-based model incorporating wealth thresholds for interactions, analyzing pattern transitions and inequality measures in stratified economic systems.

Findings

Transition from laminar to turbulent states with parameter changes

High activity correlates with low wealth inequality

Network clustering affects wealth inequality but not activity

Abstract

We investigate a model of stratified economic interactions between agents when the notion of spatial location is introduced. The agents are placed on a network with near-neighbor connections. Interactions between neighbors can occur only if the difference in their wealth is less than a threshold value that defines the width of the economic classes. By employing concepts from spatiotemporal dynamical systems, three types of patterns can be identified in the system as parameters are varied: laminar, intermittent and turbulent states. The transition from the laminar state to the turbulent state is characterized by the activity of the system, a quantity that measures the average exchange of wealth over long times. The degree of inequality in the wealth distribution for different parameter values is characterized by the Gini Coefficient. High levels of activity are associated to low values of the Gini coefficient. It is found that the topological properties of the network have little effect on the activity of the system, but the Gini coefficient increases when the clustering coefficient of the network is increased.