The distribution of wealth in the presence of altruism in simple economic models |
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| Institution: | 1. Department of Materials Science and Engineering, The Nelson Mandela African Institution of Science and Technology (NM-AIST), Arusha, Tanzania;2. Department of Chemistry, University of Dar es Salaam, Tanzania;1. Department of Chemistry, Xinzhou Teachers University, Xinzhou 034000, Shanxi, China;2. Nanocluster Laboratory, Institute of Molecular Science, Shanxi University, Taiyuan 030006, China;1. Department of Chemistry, Xinzhou Teachers University, Xinzhou 034000, Shanxi, China;2. Nanocluster Laboratory, Institute of Molecular Science, Shanxi University, Taiyuan 030006, China |
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| Abstract: | We study the effect of altruism in two simple asset exchange models: the yard sale model (winner gets a random fraction of the poorer player's wealth) and the theft and fraud model (winner gets a random fraction of the loser's wealth). We also introduce in these models the concept of bargaining efficiency, which makes the poorer trader more aggressive in getting a favorable deal thus augmenting his winning probabilities. The altruistic behavior is controlled by varying the number of traders who behave altruistically and by the degree of altruism that they show. The resulting wealth distribution is characterized using the Gini index. We compare the resulting values of the Gini index at different levels of altruism in both models. It is found that altruistic behavior does lead to a more equitable wealth distribution but only for unreasonable high values of altruism that are difficult to expect in a real economic system. |
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