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

  • Hugues BersiniEmail author
  • Nicolas van Zeebroeck
Part of the Advances in Intelligent Systems and Computing book series (AISC, volume 221)

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 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).

Keywords

ABM free market equality/efficiency trade-off 

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References

  1. 1.
    Okun, A.K.: Equality and efficiency, the big tradeoff. The Brookings Institution (1975)Google Scholar

Copyright information

© Springer International Publishing Switzerland 2013

Authors and Affiliations

  1. 1.IRIDIAUniversite Libre de BruxellesBruxellesBelgium
  2. 2.ECARESSolvay Brussels School of Economics and ManagementBruxellesBelgium

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