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

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 within 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. A competitive market is compared with a random one. Our results confirm that the superior efficiency of the competitive market (an effective 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).

Authors and Affiliations

1. IRIDIA, Universite Libre de Bruxelles, CP 194/6, 50, av. Franklin Roosevelt, Bruxelles, 1050, Belgium

   Hugues Bersini

2. ECARES, Solvay Brussels School of Economics and Management, CP 114, 50, av. Franklin Roosevelt, Bruxelles, 1050, Belgium

   Nicolas van Zeebroeck

Corresponding author

Correspondence to Hugues Bersini .

Editors and Affiliations

1. Escuela Universitaria de Informática, Universidad Pontificia de Salamanca, Salamanca, Spain

   Javier Bajo Pérez

2. Dept. of Computing Sci. and Control, University of Salamanca, Salamanca, Spain

   Juan M. Corchado Rodríguez

3. Technische Universität Berlin, Berlin, Germany

   Johannes Fähndrich

4. Technologies de Lille, Université des Sciences et Technologies de Lille, Villeneuve d’Ascq, France

   Philippe Mathieu

5. Department of Computer Science, Dartmouth College, Hanover, New Hampshire, USA

   Andrew Campbell

6. Ontology Engineering Group, Universidad Politécnica de Madrid Facultad de Informática, Boadilla del Monte, Madrid, Spain

   Mari Carmen Suarez-Figueroa

7. Departamento de Ingeniería Informática, Ciudad Universitaria de Cantoblanco, Madrid, Spain

   Alfonso Ortega

8. LAMIH (UMR CNRS 8530), Universite de Valenciennes, Valenciennes, France

   Emmanuel Adam

9. Departamento de Informática, University of Castilla-La Mancha, Albacete, Albacete, Spain

   Elena Navarro

10. Centre for Intelligent Information, University Rey Juan Carlos Madrid (URJC), Móstoles, Madrid, Spain

    Ramon Hermoso

11. Dept. de Informática y Automática, Universidad de Salamanca, Salamanca, Salamanca, Spain

    María N. Moreno

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