Title: Why the rich become richer: insights from an agent-based model

Authors: Saul Desiderio; Siyan Chen

Addresses: Business School, Shantou University, 243 Daxue Road, 515063, Shantou, Guangdong, China ' Business School, Shantou University, 243 Daxue Road, 515063, Shantou, Guangdong, China

Abstract: The aim of this paper is to investigate the reason why the rich get richer in an agent-based macroeconomic model. It shows that simulated top income and wealth follows a power law. From a dynamical point of view, it is found that revenues from financial investments are the key factor to sustaining wealth accumulation. In other words, wealth-dependent asymmetries among agents generates the power law tail.

Keywords: agent-based modelling; income distribution; wealth distribution; Gini coefficient; wealth inequality; agent-based systems; multi-agent systems; MAS; macroeconomic models; simulation; financial investments; wealth accumulation; wealth-dependent asymmetries; power law tail.

DOI: 10.1504/IJCEE.2016.077249

International Journal of Computational Economics and Econometrics, 2016 Vol.6 No.3, pp.258 - 275

Received: 06 Nov 2014
Accepted: 22 Jun 2015
Published online: 25 Jun 2016 *

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