Capital Redistribution Brings Wealth by Parrondo's Paradox

TL;DR

This paper demonstrates that redistributing capital among players in Parrondo's paradox games can turn losing strategies into winning ones, benefiting all participants regardless of redistribution direction.

Contribution

It introduces new variants of Parrondo's paradox incorporating capital redistribution, showing its beneficial effects on collective wealth.

Findings

Redistribution turns losing games into winning ones.

Beneficial effects occur whether redistribution is from rich to poor or vice versa.

Redistribution benefits all players in the ensemble.

Abstract

We present new versions of the Parrondo's paradox by which a losing game can be turned into winning by including a mechanism that allows redistribution of the capital amongst an ensemble of players. This shows that, for this particular class of games, redistribution of the capital is beneficial for everybody. The same conclusion arises when the redistribution goes from the richer players to the poorer.