Exploring the impact of multi-agent wealth exchange model on inequality reduction

TL;DR

This paper generalizes wealth exchange models to multi-agent interactions, showing that increasing the number of agents leads to a more equitable wealth distribution and reduced inequality, contrasting with binary models.

Contribution

It introduces a multi-agent exchange model that captures more realistic market interactions and demonstrates its impact on wealth distribution and inequality reduction.

Findings

Wealth distribution becomes more uniform as the number of agents increases.

Inequality metrics decrease monotonically with more agents.

Multi-agent interactions reduce inequality differently than binary models.

Abstract

Binary kinetic exchange models, where money is shuffled between two agents at a time, reproduce the Boltzmann Gibbs exponential wealth distribution but cannot address the multi party trades common in real markets. We generalize the exchange rule to simultaneous interactions among more than two agents in a closed economical system. We observe, as number of agents grow, the stationary wealth distribution evolves smoothly from an exponential to an almost uniform distribution. Inequality metrics (Gini and k index) has been found to fall monotonically with the increase in agents number. Compared with binary models that rely on saving propensities, which is also known to reduce inequality, we find the multi agent interaction show a completely different behavior of inequality reduction.