A Stylized Software Model to Explore the Free Market Equality/Efficiency Tradeoff

Hugues Bersini () and Nicolas van Zeebroeck
Additional contact information
Hugues Bersini: Université Libre de Bruxelles

A chapter in Artificial Economics and Self Organization, 2014, pp 31-40 from Springer

Abstract: Abstract This paper provides an agent-based software exploration of the well-known free market efficiency/equality trade-off. Our study simulates the interaction of agents producing, trading and consuming goods in the presence of different market structures, and looks at how efficient the producers/consumers mapping turn out to be as well as the resulting distribution of welfare among agents at the end of an arbitrarily large number of iterations. Two market mechanisms are compared: the competitive market (a double auction market in which agents outbid each other in order to buy and sell products) and the random one (in which products are allocated randomly). Our results confirm that the superior efficiency of the competitive market (an effective and never stopping producers/consumers mapping and a superior aggregative welfare) comes at a very high price in terms of inequality (above all when severe budget constraints are in play).

Keywords: Competitive Market; Market Failure; Reservation Price; Total Utility; Initial Endowment (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-319-00912-4_3

Ordering information: This item can be ordered from
http://www.springer.com/9783319009124

DOI: 10.1007/978-3-319-00912-4_3

Access Statistics for this chapter

More chapters in Lecture Notes in Economics and Mathematical Systems from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().