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Wealth inequality in the minority game
1Department of Physics, University of Hong Kong, Pokfulam Road, Hong Kong.
Physical Review. E, Statistical, Nonlinear, and Soft Matter Physics
|February 9, 2005
Summary
Wealth inequality in the minority game (MG) is severe during optimal cooperation. This econophysics study uses the modified Gini index to measure wealth distribution in the MG model.
Area of Science:
- Econophysics
- Complex Systems
- Game Theory
Background:
- The minority game (MG) is a widely studied econophysical model.
- Understanding wealth distribution in economic systems is crucial.
Purpose of the Study:
- To investigate wealth inequality in the minority game (MG) using physical approaches.
- To demonstrate the utility of econophysics for studying realistic economic systems.
Main Methods:
- Numerical simulations of the minority game.
- Application of the modified Gini index to quantify wealth inequality.
- Semi-analytical reproduction of results using the replica method.
Main Results:
- Wealth inequality in the MG is most severe near the point of maximum cooperation.
- Optimal cooperation coincides with significant disparities in player wealth.
- Numerical findings in the asymmetric phase are validated by the replica method.
Conclusions:
- Physical approaches, particularly econophysics, offer valuable insights into economic phenomena like wealth inequality.
- The minority game exhibits a trade-off between cooperation and equitable wealth distribution.
- The replica method provides a robust analytical tool for econophysical models.
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