Explicit decay rate for the Gini index in the repeated averaging model

DOI10.1002/MMA.8711arXiv2108.07904OpenAlexW3193702404MaRDI QIDQ6182935FDOQ6182935

Authors: Fei Cao 

Publication date: 22 December 2023

Published in: Mathematical Methods in the Applied Sciences (Search for Journal in Brave)

Abstract: We investigate the repeated averaging model for money exchanges: two agents picked uniformly at random share half of their wealth to each other. It is intuitively convincing that a Dirac distribution of wealth (centered at the initial average wealth) will be the long time equilibrium for this dynamics. In other words, the Gini index should converge to zero. To better understand this dynamics, we investigate its limit as the number of agents goes to infinity by proving the so-called propagation of chaos, which links the stochastic agent-based dynamics to a (limiting) nonlinear partial differential equation (PDE). This deterministic description has a flavor of the classical Boltzmann equation arising from statistical mechanics of dilute gases. We prove its convergence toward its Dirac equilibrium distribution by showing that the associated Gini index of the wealth distribution converges to zero with an explicit rate.

Full work available at URL: https://arxiv.org/abs/2108.07904

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zbMATH Keywords

Gini indexeconophysicspropagation of chaosagent-based modelrepeated averaging

Mathematics Subject Classification ID

Applications of statistical and quantum mechanics to economics (econophysics) (91B80) Welfare economics (91B15)

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Cited In (5)

• From the binomial reshuffling model to Poisson distribution of money
• Concentration and local smoothness of the averaging process
• Repeated averages on graphs
• Bounding the approach to oligarchy in a variant of the yard-sale model
• From interacting agents to Boltzmann-Gibbs distribution of money

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