Rigorous Results for the Distribution of Money on Connected Graphs (Models with Debts)

Nicolas Lanchier, Stephanie Reed

Research output: Contribution to journalArticle

Abstract

In this paper, we continue our analysis of spatial versions of agent-based models for the dynamics of money that have been introduced in the statistical physics literature, focusing on two models with debts. Both models consist of systems of economical agents located on a finite connected graph representing a social network. Each agent is characterized by the number of coins she has, which can be negative in case she is in debt, and each monetary transaction consists in one coin moving from one agent to one of her neighbors. In the first model, that we name the model with individual debt limit, the agents are allowed to individually borrow up to a fixed number of coins. In the second model, that we name the model with collective debt limit, agents can borrow coins from a central bank as long as the bank is not empty, with reimbursements occurring each time an agent in debt receives a coin. Based on numerical simulations of the models on complete graphs, it was conjectured that, in the large population/temperature limits, the distribution of money converges to a shifted exponential distribution for the model with individual debt limit, and to an asymmetric Laplace distribution for the model with collective debt limit. In this paper, we prove exact formulas for the distribution of money that are valid for all possible social networks. Taking the large population/temperature limits in the formula found for the model with individual debt limit, we prove convergence to the shifted exponential distribution, thus establishing the first conjecture. Simplifying the formula found for the model with collective debt limit is more complicated, but using a computer to plot this formula shows an almost perfect fit with the Laplace distribution, which strongly supports the second conjecture.

Original languageEnglish (US)
JournalJournal of Statistical Physics
DOIs
StatePublished - Jan 1 2019
Externally publishedYes

Fingerprint

Graph Model
Connected graph
Model
Exponential distribution
Social Networks
Money
Agent-based Model
Statistical Physics
Finite Graph
Complete Graph
Transactions
Continue
Valid
plots
Converge
Numerical Simulation

Keywords

  • Distribution of money
  • Econophysics
  • Interacting particle systems
  • Models with debts

ASJC Scopus subject areas

  • Statistical and Nonlinear Physics
  • Mathematical Physics

Cite this

Rigorous Results for the Distribution of Money on Connected Graphs (Models with Debts). / Lanchier, Nicolas; Reed, Stephanie.

In: Journal of Statistical Physics, 01.01.2019.

Research output: Contribution to journalArticle

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