NetLogo User Community Models(back to the NetLogo User Community Models)

Download If clicking does not initiate a download, try right clicking or control clicking and choosing "Save" or "Download".
Try It in NetLogo Web

# Rich get Richer vs Wealth Tax.nlogo
Author: Rupert Nagler, Jan 2020, nagler@idi.co.at
## WHAT IS IT? **"The rich get richer"**  you can hear it everywhere today. But why? Playing with this model you will learn and understand the intrinsic workings of **multiplicative growth** and a possible remedy. We abstract economic transactions by simulating a bilateral coin game played pairwise by a set of turtles sitting on a blue 2dworld. The vertical position reflects their actual wealth, the horizontal position the turtle's unique who number. Currently playing pairs are pictured by a link. Lorenz Curve, Gini Coefficient and a histogram show the actual distribution of wealth. You can explore the effects of cumulative growth obscured by the **misleading ergodic hypothesis** in traditional economics and the **benefits of cooperation** induced by a form of wealthtax. Idea influenced by Ole Peters, LML, see: https://ergodicityeconomics.files.wordpress.com/2018/06/ergodicity_economics.pdf
## HOW IT WORKS
* A fraction "selectratio" of turtles throw a coin pairwise at each tick, the bet is a fraction "transferratio" of the minimum of the wealth of both turtles. * For the looser the bet is multiplied by "loosemult" and then subtracted from his wealth. For the winner the bet is multiplied by "winmult" and then added to his wealth. * After all pairs have thrown their coins and their wealth was transferred, some redistribution in the form of a wealthtax may be applied: If "taxfactor" is > 0 and wealth is > "taxlimit" a wealth tax (wealth * taxfactor) is subtracted. Then the collected wealth tax is redistributed evenly to all turtles or to the poor turtles below taxlimit, depending on the switch "redistall?". * So you can simulate the effects of cooperation thru risksharing between players.
## HOW TO USE IT
* Use the sliders to control the number of turtles "numturtles" and the initial wealth "initwealth". * If you switch "randominitwealth?" to "off" each turtle receives the equal "initwealth" wealth. If you switch "randominitwealth?" to "on" each turtle receives a random wealth between 1 and "initwealth". * Set the fraction of the minimum wealth of both turtles "leverage" to bet and the fraction of all turtles to play in one tick "selectionratio". * Set the multiplicative factors "loosemult", "winmult" (default: 1.0) to be applied to the transfer of the bet. * Optional set a "taxfactor", "taxlimit", and "redistall?" * If you want bancrupt turtles to die, set "turtlesdie?" to on. * To initialize the simulation "setup". * To play one round press "go1", to play as long as you wish, press "go".
## THINGS TO NOTICE
* You see all turtles sitting on the black world area. Each turtle will go up or down vertically dependent of its current wealth after each tick. * Each pair of turtles (link) engaged in throwing a coin is connected by a line. * In the wealthplot you see min, max, mean and median of the turtles wealth on a log10 scale. * In the wealthdistribution histogramm you see the number of turtles in different classes of wealth. * In the Lorenz Plot you see the actual shape of the Lorenz Curve. * In the Gini Plot you see the value of the Gini Coefficient over time.
## THINGS TO TRY
* Try different values for multiplicative growth ("loosemult", "winmult"), * Compare the wealthdistribution for no multiplicative growth (set both "loosemult", "winmult" to 1.0) to other values of multiplicative growth (eg. 0.6, 1.5) * Try different "taxfactor"s and "taxlimits", switch "redistall?" on/off. * What effects can you see in the histogram, Gini Plot and Lorenz Curve?
## EXTENDING THE MODEL
* better visualization ideas? * turtles get children and die of age * implement inheritance tax
## NETLOGO FEATURES
* using turtle world to show turtle ranking by position, * histogram on varying upper and lower bounds,
## RELATED MODELS
http://ccl.northwestern.edu/netlogo/models/WealthDistribution http://ccl.northwestern.edu/netlogo/models/Sugarscape3WealthDistribution
## CREDITS & REFERENCES
credit: computation of lorenz curve and gini index copied from: NetLogo models WealthDistribution
indepth readings:
Wikipedia: Distribution of wealth, retrieved 12/2019 https://en.wikipedia.org/wiki/Distribution_of_wealth
Wikipedia: Lorenz Curve, retrieved 12/2019 https://en.wikipedia.org/wiki/Lorenz_curve
Wikipedia: Gini Coefficient, retrieved 12/2019 https://en.wikipedia.org/wiki/Gini_coefficient
Wikipedia: Ergodic process, retrieved 12/2019 https://en.wikipedia.org/wiki/Ergodic_process
Ergodicity Economics, Ole Peters and Alexander Adamou, 2018 https://ergodicityeconomics.files.wordpress.com/2018/06/ergodicity_economics.pdf
Entrepreneurs, Chance, and the Deterministic Concentration of Wealth, Joseph E. Fargione u.a., 2011 https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0020728&type=printable
An evolutionary advantage of cooperation, Ole Peters and Alexander Adamou, 2018 https://arxiv.org/pdf/1506.03414.pdf
Capital and Ideology, Thomas Piketty, 2019 http://piketty.pse.ens.fr/files/Piketty2020SlidesLongVersion.pdf
Farmers Fable: Simulation benefits of cooperation, retrieved 12/2019 https://www.farmersfable.org/
Gier, Marc Elsberg, novel, blanvalet 2019 https://gierdasbuch.de/gier.php
## COPYRIGHT
Copyright 2020 Rupert Nagler, nagler@idi.co.at. All rights reserved. Permission to use, modify or redistribute this model is hereby granted, provided that both of the following requirements are followed:
* this copyright notice is included. * this model will not be redistributed for profit without permission from Rupert Nagler.
Contact the author for appropriate licenses for redistribution for profit.
