{"title": "Universal Growth in Production Economies", "book": "Advances in Neural Information Processing Systems", "page_first": 1973, "page_last": 1973, "abstract": "We study a simple variant of the von Neumann model of an expanding economy, in which multiple producers make goods according to their production function. The players trade their goods at the market and then use the bundles received as inputs for the production in the next round.  The decision that players have to make is how to invest their money (i.e. bids) in each round.\n\nWe show that a simple decentralized dynamic, where players update their  bids on the goods in the market proportionally to how useful the investments were, leads to growth of the economy in the long term (whenever growth is possible) but also creates unbounded inequality, i.e. very rich and very poor players emerge. We analyze several other phenomena, such as how the relation of a player with others influences its development and the Gini index of the system.", "full_text": "Universal Growth in Production Economies\n\nSimina Br\u00e2nzei\nPurdue University\n\nsimina@purdue.edu\n\nRuta Mehta\n\nUniversity of Illinois, Urbana-Champaign\n\nrutamehta@illinois.edu\n\nNoam Nisan\n\nHebrew University and Microsoft Research\n\nnoam@cs.huji.ac.il\n\nAbstract\n\nWe study a simple variant of the von Neumann model of an expanding economy,\nin which multiple producers make goods according to their endowed production\nfunction. The players trade their goods at the market and then use the bundles\nacquired as inputs for the production in the next round. The decision that players\nhave to make is how to invest their money (i.e. bids) in each round.\n\nWe show that a simple decentralized dynamic, where players update their bids\nproportionally to how useful the investments were in the past round, leads to growth\nof the economy in the long term (whenever growth is possible) but also creates\nunbounded inequality, i.e. very rich and very poor players emerge. We analyze\nseveral other phenomena, such as how the relation of a player with others in\ufb02uences\nits development and the Gini index of the system. 1\n\nAcknowledgments\n\nThis project has received funding from the European Research Council (ERC) under the European\nUnion\u2019s Horizon 2020 research and innovation programme (grant agreement No 740282), from the\nISF grant 1435/14 administered by the Israeli Academy of Sciences and Israel-USA Bi-national\nScience Foundation (BSF) grant 2014389, and from the NSF grant CCF 1750436.\n\n1The full version of the paper is available at https://arxiv.org/abs/1802.07385.\n\n32nd Conference on Neural Information Processing Systems (NeurIPS 2018), Montr\u00e9al, Canada.\n\n\f", "award": [], "sourceid": 991, "authors": [{"given_name": "Simina", "family_name": "Branzei", "institution": "Purdue University"}, {"given_name": "Ruta", "family_name": "Mehta", "institution": "UIUC"}, {"given_name": "Noam", "family_name": "Nisan", "institution": "Hebrew University of Jerusalem and Microsoft Research"}]}