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A unified framework for the pareto law and Matthew effect using scale-free networks

Author

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  • M.-B. Hu
  • W.-X. Wang
  • R. Jiang
  • Q.-S. Wu
  • B.-H. Wang
  • Y.-H. Wu

Abstract

We investigate the accumulated wealth distribution by adopting evolutionary games taking place on scale-free networks. The system self-organizes to a critical Pareto distribution (1897) of wealth P(m)∼m -(v+1) with 1.6 > v >2.0 (which is in agreement with that of U.S. or Japan). Particularly, the agent's personal wealth is proportional to its number of contacts (connectivity), and this leads to the phenomenon that the rich gets richer and the poor gets relatively poorer, which is consistent with the Matthew Effect present in society, economy, science and so on. Though our model is simple, it provides a good representation of cooperation and profit accumulation behavior in economy, and it combines the network theory with econophysics. Copyright EDP Sciences/Società Italiana di Fisica/Springer-Verlag 2006

Suggested Citation

  • M.-B. Hu & W.-X. Wang & R. Jiang & Q.-S. Wu & B.-H. Wang & Y.-H. Wu, 2006. "A unified framework for the pareto law and Matthew effect using scale-free networks," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 53(2), pages 273-277, September.
    • Handle: RePEc:spr:eurphb:v:53:y:2006:i:2:p:273-277
    DOI: 10.1140/epjb/e2006-00365-8
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    Cited by:

    1. Alexander Kustov, 2017. "How ethnic structure affects civil conflict: A model of endogenous grievance," Conflict Management and Peace Science, Peace Science Society (International), vol. 34(6), pages 660-679, November.
    2. Tol, Richard S.J., 2013. "The Matthew effect for cohorts of economists," Journal of Informetrics, Elsevier, vol. 7(2), pages 522-527.
    3. Zanin, Massimiliano & Papo, David & Romance, Miguel & Criado, Regino & Moral, Santiago, 2016. "The topology of card transaction money flows," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 462(C), pages 134-140.
    4. Massimiliano Zanin & David Papo & Miguel Romance & Regino Criado & Santiago Moral, 2016. "The topology of card transaction money flows," Papers 1605.04938, arXiv.org.

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