Reference Point Formation in Social Networks, Wealth Growth, and Inequality

Youcheng Lou, Moris S. Strub, Duan Li, Shouyang Wang
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引用次数: 5

Abstract

We investigate reference point formation in a social network of multiple investors and study its impact on wealth growth and inequality under a framework of Prospect Theory. The reference point of each individual investor contains both personal and social components. Whereas the personal component depends on the investor’s own history of wealth, the social component is determined by the wealth level of other investors in her network. In the benchmark case without social interactions and under the assumption of homogeneous preferences, each investor’s expected wealth grows at a common rate, the wealth gaps widens and the Gini coefficient remains constant. On the other hand, if the reference point is determined solely by social interactions, then, while the specific behavior depends on the model parameters, it is possible that the network simultaneously experiences high wealth growth and a reduction in inequality. Finally, for the general case where the reference point incorporates both personal and social components, we numerically show that increasing the degree of social interaction is beneficial for both increasing wealth growth and
reducing inequality.
社会网络中的参考点形成、财富增长和不平等
在前景理论的框架下,我们研究了由多个投资者组成的社会网络中的参考点形成,并研究了其对财富增长和不平等的影响。每个个体投资者的参考点包含个人和社会两个部分。个人成分取决于投资者自身的财富历史,而社会成分则取决于其网络中其他投资者的财富水平。在没有社会互动的基准情况下,在偏好均质的假设下,各投资者的预期财富以共同的速度增长,贫富差距扩大,基尼系数保持不变。另一方面,如果参考点仅由社会互动决定,那么,虽然具体行为取决于模型参数,但网络可能同时经历高财富增长和不平等减少。最后,对于参考点包含个人和社会成分的一般情况,我们通过数字表明,增加社会互动程度对增加财富增长和减少不平等都是有益的。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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