Kinetic models for goods exchange in a multi-agent market

TL;DR

This paper develops kinetic models using Boltzmann-type equations to analyze how different trading strategies of agents influence goods prices in a multi-agent market with two populations.

Contribution

It introduces a novel kinetic framework for modeling goods exchange with strategic behavior, linking microscopic rules to macroscopic price dynamics.

Findings

Speculators' strategies can significantly influence market prices.

The model predicts price zones with high utility for speculators.

Numerical experiments demonstrate policy impacts on final prices.

Abstract

We introduce a system of kinetic equations describing an exchange market consisting of two populations of agents (dealers and speculators) expressing the same preferences for two goods, but applying different strategies in their exchanges. We describe the trading of the goods by means of some fundamental rules in price theory, in particular by using Cobb-Douglas utility functions for the exchange. The strategy of the speculators is to recover maximal utility from the trade by suitably acting on the percentage of goods which are exchanged. This microscopic description leads to a system of linear Boltzmann-type equations for the probability distributions of the goods on the two populations, in which the post-interaction variables depend from the pre-interaction ones in terms of the mean quantities of the goods present in the market. In this case, it is shown analytically that the strategy of the speculators can drive the price of the two goods towards a zone in which there is a marked utility for their group. Also, the general system of nonlinear kinetic equations of Boltzmann type for the probability distributions of the goods on the two populations is described in details. Numerical experiments then show how the policy of speculators can modify the final price of goods in this nonlinear setting.