paper

Extended Yard Sale model of wealth distribution on Erdős-Rényi random networks

arXiv:2505.04032 · doi:10.1103/8rbw-kr8n

Abstract

Excessive wealth concentration can undermine economic and social development. Random Asset Exchange (RAE) models provide valuable tools to investigate this phenomenon. Assuming that economic systems may operate optimally near the critical point of a continuous phase transition, the Extended Yard Sale (EYS) model introduced by Boghosian et al.~[Physica A 476, 15 (2017)] offers a compelling framework. This model captures the interplay between wealth redistribution and accumulation, exhibiting a continuous phase transition marked by a broad wealth distribution at criticality, separating a condensed phase -- where a microscopic fraction of agents holds a macroscopic share of total wealth -- from a distributed phase with a light-tailed wealth distribution. While the original EYS model assumes fully connected interactions, this work introduces and studies a networked variant where agents interact over Erdős-Rényi random networks. The analysis combines Monte Carlo simulations with Quenched Mean Field and Mean Field approximations, exploring a variety of interaction and taxation schemes. A scaling analysis shows that, although the networked model also undergoes a continuous phase transition, it leads to local wealth condensation rather than the global condensation found in the fully connected case. These results deepen our understanding of wealth dynamics in structured populations and may help inform the development of more effective economic and social policies.

15 pages and 10 figures

References in corpus (8)