Global Adaptive Equity Pricing (GAEP): A Theoretical Model of AI-Enabled Consumption-Based Redistribution

Abstract

This paper proposes Global Adaptive Equity Pricing (GAEP), a novel AI-driven framework for moderating economic inequality through real-time, consumption-event-based price personalization. At each domestic purchase, biometric verification links to encrypted networth data to compute a progressive adjusted price using the Wealth Elasticity Pricing Equation (WEPE). Excess payments from higher-net-worth individuals fund a transparent Gini Moderation Fund (GMF) for AI-optimized redistribution targeting a blended Gini coefficient of ≈0.30. Tunable parameters enable governments to control moderation velocity, balancing equity gains against capital retention risks in wealth-attracting jurisdictions. Calibrated to Singapore's 2025-2026 data (income Gini after transfers and taxes: 0.379; market income Gini before transfers: 0.452; wealth Gini: 0.55; top 1% hold ~14%, top 5% ~33% of household wealth), agent-based simulations project 15-41% Gini reductions over 20 quarterly cycles. Ethical safeguards include zero-knowledge proofs, blockchain-audited aggregates (no personal data exposure), fairness audits, and positive incentives. GAEP extends Gini theory and computational economics by integrating biometric technology with redistributive algorithms, distinct from usage-tiered tariffs or surveillance pricing. It offers policymakers a pathway for dynamic, consumption-led equity in AI-augmented economies while preserving innovation incentives.