The Evolution of Wealth Inequality: An Interactive Guide

The Inequality Game

A few weeks ago, I came across a very simple game that demonstrates a very interesting point about how inequality emerges in a society.

Take a group of people and give each one $5. Ask them to pair up and each pair does a coin toss. The loser of the coin toss has to choose an amount between $1 to $5 and give it to the winner. Play multiple rounds of this.

The surprising outcome of this game is that wealth starts to accumulate in a small number of hands and most people go broke! Without invoking any real world factors such as hard work, intelligence, status, etc!

Why does this happen?

It’s because a person can only bet up to the amount that they have. So if, after a few rounds, you have only $2 left, then you can only bet $1 or $2. This limits your upside. If you have more than $5, then you can always bet up to $5 which increases your upside. Of course, you personally can have an unlucky streak, but as a group, if you play enough rounds of this, someone ends up with most of the money and most people end up broke.

In the extreme case, if you lose all your money, you can’t even play the game anymore!

As you play more and more rounds, the ones with more money typically end up with even more money and the ones with less money end up with even less money.

This concept isn’t new. It has been captured in age old saying such as “money follows money” or “it takes money to make more money” etc.

I was fascinated by this outcome and wondered if it might make sense to create an online simulation of this game. Just for fun and education.

So I wrote to the UNC Chapel Hill professor Dr. Howard Aldrich in whose paper I had come across this game. He was immediately very receptive and encouraged me to develop it. He also provided the discussion points towards the end of the guide.

Here is the end result of that collaboration, titled “The Evolution of Wealth Inequality: An Interactive Guide“.

Check it out, particularly when you are on a laptop or tablet device. The game is browser based so it will work on any device, but the experience is not as compelling on smaller screen devices.

Here is Dr. Aldrich’s blog post related to the same.

Future Directions

I am hoping to make this an ongoing project, adding more and more interesting factors like allowing people to take out loans / investments, taxation, forming groups, and so on into the mix and simulating how that affects outcomes. It will hopefully become more of an interactive guide on economic issues overall, not necessarily limited to just inequality.

Though economic inequality has been an interesting topic for me for a while. I have written about it before: The Liquid Pyramid Theory. It’s a little bit darker, but also has as weird scifi type silver lining!

I realize that this is a politically charged topic, but I am hoping to steer clear of it as much as possible. (Tough to do these days, I know!)

The Evolution of Trust

I should also give a shout out to The Evolution of Trust by Nicky Case for planting the idea of developing an interactive guide about some economic concept into my head. Please check out his guide that helps you understand how trust evolves in a society.

Techie Stuff

My other objective behind developing this interactive guide was to learn how to develop HTML 5 games. I looked at a few frameworks and ended up choosing Phaser 3. I was not disappointed. It is an excellent framework for developing HTML 5 games.

I did learn a few lessons though:

Phaser is great for developing the interactive part of your UX, but it’s probably not best to use it for the entire site! I didn’t realize this up front because I was new to Phaser and also because the project evolved a sit went. So I ended up creating the whole guide in Phaser. This is not just an overkill, but it also creates problems with responsive layouts for mobile devices, handling orientation changes, preventing users from using browser features like zooming in / out and so on.
Another way Phaser could be an overkill is that this isn’t quite a “game”. For example, there is no physics in it, not a lot of interactivity or graphics. I suppose a simpler framework would have sufficed.
When I do a major revision of this guide, I will probably extract just the interactive part of it for implementing in Phaser and keep the rest of the guide as plain old HTML.
Another problem with this is that typically a site like this will go through many revisions of the textual content in it and having to do a build every time the text changes (since the text is a part of the javascript code) is not very safe.
I used tweening for the animations. This can make the animations glitchy at times.
I also heard from a few people that the guide did not work for them on their browsers. I guess Phaser does have some limitations about certain combinations of browsers and OS.
On the positive side, I used Typescript for all my code and that was a major boon to productivity and robustness. I am very happy with this choice. A special shout out to Ourcade for making this excellent tutorial that helped me get started with using Typescript with Phaser 3.

Overall though, it has been a positive experience. And I intend to develop more stuff with Phaser, keeping in mind some of the lessons learned.