Wealth distribution of simple exchange models coupled with extremal dynamics

• We study the wealth distribution simulating two well known asset exchange models.
• We select Yard sale model (YS) and the theft and fraud model (TF).
• Effect of Punctuated Equilibrium (PE) was introduced in YS and TF Models.
• PE makes results from YS and TF Models more realistic avoiding “Economy collapses”.
• Wealth distribution for YS Model decays as an asymptotic power law.

Punctuated Equilibrium (PE) states that after long periods of evolutionary quiescence, species evolution can take place in short time intervals, where sudden differentiation makes new species emerge and some species extinct. In this paper, we introduce and study the effect of punctuated equilibrium on two different asset exchange models: the yard sale model (YS, winner gets a random fraction of a poorer player’s wealth) and the theft and fraud model (TF, winner gets a random fraction of the loser’s wealth). The resulting wealth distribution is characterized using the Gini index. In order to do this, we consider PE as a perturbation with probability ρρ of being applied. We compare the resulting values of the Gini index at different increasing values of ρρ in both models. We found that in the case of the TF model, the Gini index reduces as the perturbation ρρ increases, not showing dependence with the agents number. While for YS we observe a phase transition which happens around ρc=0.79ρc=0.79. For perturbations ρ<ρcρ<ρc the Gini index reaches the value of one as time increases (an extreme wealth condensation state), whereas for perturbations greater than or equal to ρcρc the Gini index becomes different to one, avoiding the system reaches this extreme state. We show that both simple exchange models coupled with PE dynamics give more realistic results. In particular for YS, we observe a power low decay of wealth distribution.