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# Rich get Richer vs Wealth Tax.nlogo
Author: Rupert Nagler, Jan 2020, email@example.com
## 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 2d-world. 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 wealth-tax.
Idea influenced by Ole Peters, LML, see:
## HOW IT WORKS
* A fraction "select-ratio" of turtles throw a coin pairwise at each tick, the bet is a fraction "transfer-ratio" of the minimum of the wealth of both turtles.
* For the looser the bet is multiplied by "loose-mult" and then subtracted from his wealth. For the winner the bet is multiplied by "win-mult" 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 wealth-tax may be applied: If "tax-factor" is > 0 and wealth is > "tax-limit" a wealth tax (wealth * tax-factor) is subtracted. Then the collected wealth tax is redistributed evenly to all turtles or to the poor turtles below tax-limit, depending on the switch "redist-all?".
* So you can simulate the effects of cooperation thru risk-sharing between players.
## HOW TO USE IT
* Use the sliders to control the number of turtles "num-turtles" and the initial wealth "init-wealth".
* If you switch "random-init-wealth?" to "off" each turtle receives the equal "init-wealth" wealth. If you switch "random-init-wealth?" to "on" each turtle receives a random wealth between 1 and "init-wealth".
* Set the fraction of the minimum wealth of both turtles "leverage" to bet and the fraction of all turtles to play in one tick "selection-ratio".
* Set the multiplicative factors "loose-mult", "win-mult" (default: 1.0) to be applied to the transfer of the bet.
* Optional set a "tax-factor", "tax-limit", and "redist-all?"
* If you want bancrupt turtles to die, set "turtles-die?" to on.
* To initialize the simulation "setup".
* To play one round press "go-1", 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 wealth-plot you see min, max, mean and median of the turtles wealth on a log10 scale.
* In the wealth-distribution 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 ("loose-mult", "win-mult"),
* Compare the wealth-distribution for no multiplicative growth (set both "loose-mult", "win-mult" to 1.0) to other values of multiplicative growth (eg. 0.6, 1.5)
* Try different "tax-factor"s and "tax-limits", switch "redist-all?" 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
## CREDITS & REFERENCES
credit: computation of lorenz curve and gini index copied from:
NetLogo models WealthDistribution
Wikipedia: Distribution of wealth, retrieved 12/2019
Wikipedia: Lorenz Curve, retrieved 12/2019
Wikipedia: Gini Coefficient, retrieved 12/2019
Wikipedia: Ergodic process, retrieved 12/2019
Ergodicity Economics, Ole Peters and Alexander Adamou, 2018
Entrepreneurs, Chance, and the Deterministic Concentration of Wealth, Joseph E. Fargione u.a., 2011
An evolutionary advantage of cooperation, Ole Peters and Alexander Adamou, 2018
Capital and Ideology, Thomas Piketty, 2019
Farmers Fable: Simulation benefits of cooperation, retrieved 12/2019
Gier, Marc Elsberg, novel, blanvalet 2019
Copyright 2020 Rupert Nagler, firstname.lastname@example.org. 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.