Conservative self-organized extremal model for wealth distribution

TL;DR

This paper introduces a modified conservative extremal wealth distribution model with stochastic bipartite trading, revealing a new universality class and non-trivial persistence time distributions through numerical analysis.

Contribution

It presents a novel wealth distribution model with a stochastic bipartite trading rule, showing distinct critical exponents and universality class compared to existing models.

Findings

The model exhibits critical exponents indicating a new universality class.

Persistence times follow a non-trivial power law distribution.

Opposite wealth selection also shows similar critical behavior.

Abstract

We present a detailed numerical analysis of the modified version of a conservative self-organized extremal model introduced by Pianegonda et. al. for the distribution of wealth of the people in a society. Here the trading process has been modified by the stochastic bipartite trading rule. More specifically in a trade one of the agents is necessarily the one with the globally minimal value of wealth, the other one being selected randomly from the neighbors of the first agent. The pair of agents then randomly re-shuffle their entire amount of wealth without saving. This model has most of the characteristics similar to the self-organized critical Bak-Sneppen model of evolutionary dynamics. Numerical estimates of a number of critical exponents indicate this model is likely to belong to a new universality class different from the well known models in the literature. In addition the persistence time, which is the time interval between two successive updates of wealth of an agent has been observed to have a non-trivial power law distribution. An opposite version of the model has also been studied where the agent with maximal wealth is selected instead of the one with minimal wealth, which however, exhibits similar behavior as the Minimal Wealth model.