Collective strategy condensation: When envy splits societies

Claudius Gros

Papers from arXiv.org

Abstract: Human societies are characterized, besides others, by three constituent features. (A) Options, as for jobs and societal positions, differ with respect to their associated monetary and non-monetary payoffs. (B) Competition leads to reduced payoffs when individuals compete for the same option with others. (C) People care how they are doing relatively to others. The latter trait, the propensity to compare one's own success with that of others, expresses itself as envy. It is shown that the combination of (A)-(C) leads to spontaneous class stratification. Societies of agents split endogenously into two social classes, an upper and a lower class, when envy becomes relevant. A comprehensive analysis of the Nash equilibria characterizing a basic reference game is presented. Class separation is due to the condensation of the strategies of lower-class agents, which play an identical mixed strategy. Upper class agents do not condense, following individualist pure strategies. Model and results are size-consistent, holding for arbitrary large numbers of agents and options. Analytic results are confirmed by extensive numerical simulations. An analogy to interacting confined classical particles is discussed.

Date: 2021-01
New Economics Papers: this item is included in nep-cmp and nep-gth
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Citations: View citations in EconPapers (2)

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