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Success-breeds-success distributional dynamics in stochastic competitive systems

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Abstract

Simon (Biometrika 52:425–440, 1955) demonstrated that distributional principles are not necessarily field-specific. Several investigations across various disciplines have referred to similar types of power-law distributions, which inherently incline towards the concentration of the outcome variable. These patterns are often attributed to the so-called “success-breeds-success” (SBS) principle. The first aim of this paper is to decipher the fundamentals of this principle across various disciplines. The second aim is to create a supra-disciplinary model that is able to serve as a default analytical tool for the modelling of SBS dynamics within competitive stochastic systems, for the purpose of which we position homogeneous agents with self-preserving behaviour in competition for scarce resources. It is given that: (1) Agents are not auto-reproductive; hence the self-preservation stimulus forces them to appropriate resources; (2) appropriable resources exist in limited quantities at a given time and in a given space, and agents must compete for these scarce resources; (3) agents implicitly pursue their competitiveness in order to appropriate enough resources for their lifelong reproduction; and (4) the more resources the agent has in the present, the higher the probability of his appropriation in the future. Assuming these conditions, we ran a simulation of 25 million mutual interactions based on the binary dyadic tree for two-agent competition. Despite the perfectly competitive market conditions, the results revealed diverging accumulation trajectories. In contrast to mainstream economic models, the paper provides new perspectives on competition and suggests, in particular, that the distributional dynamics of competitive markets comprise the inequality-driving force in market economies.

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Fig. 1

Source Own elaboration

Fig. 2

Source Own elaboration

Fig. 3

Source: Own elaboration

Fig. 4

Source Own computations

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Data availability

The data that support the findings of this study are available upon request in Zenodo at https://doi.org/10.5281/zenodo.3755745

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Acknowledgements

I would like to extend my special thanks to the participants of the International Atlantic Economic Society Conference which was held in October 2022 in Washington D.C. I also wish to thank Umut Ünal, Robert Jahoda, Jiri Vyhlidal and others from RILSA for their insightful comments. Finally, I am deeply obliged to the two anonymous reviewers of the study for their time and effort when reviewing the manuscript. I sincerely appreciate their valuable comments and suggestions, which helped me to improve the quality and clarity of the manuscript.

Funding

This study was partly supported by the Ministry of Labour and Social Affairs of the Czech Republic (IP70203).

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  1. Research Institute for Labour and Social Affairs, Delnicka 12, 162 00, Prague, Czech Republic

    Robin Maialeh

  2. School of Business, University of Chemistry and Technology, Jankovcova 23, 170 00, Prague, Czech Republic

    Robin Maialeh

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Correspondence to Robin Maialeh.

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The author is the managing director of an independent public research institution (the Research Institute for Labour and Social Affairs—RILSA) and has no relevant financial or non-financial interests to disclose.

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Maialeh, R. Success-breeds-success distributional dynamics in stochastic competitive systems. Qual Quant 58, 1901–1916 (2024). https://doi.org/10.1007/s11135-023-01721-9

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