A poor agent and subsidy: an investigation through CCM model

Area of Science:

• Economics
• Sociology
• Statistical Mechanics

Background:

• Kinetic wealth exchange models simulate economic interactions and wealth distribution.
• Agents below a threshold line represent economically vulnerable populations eligible for subsidies.
• Understanding subsidy effects is crucial for economic policy and social welfare.

Purpose of the Study:

• To analyze the dynamics of agents below a threshold line in modified kinetic wealth exchange models.
• To investigate the impact of one-time versus repeated subsidies on agent behavior within the gain-loss space.
• To compare the macroscopic behavior of these agents to a lazy walk.

Main Methods:

• Modeling agents' wealth dynamics using a modified Continuous Conservative Model (CCM).
• Defining interaction rules based on a wealth threshold line.
• Analyzing agent movement in the abstract gain-loss space (GLS).

Main Results:

• A single subsidy event leads to a more positive drift in the gain-loss space compared to repeated subsidies.
• Agent interactions are prohibited if both parties fall below the wealth threshold.
• The macroscopic behavior of these agents resembles a lazy walk.

Conclusions:

• A one-time subsidy is more effective in promoting positive economic drift for agents below the threshold.
• The study provides insights into optimizing subsidy strategies in economic models.
• Findings contribute to the understanding of kinetic exchange models in socio-economic contexts.