Business size distributions

R. D'Hulst and G.J. Rodgers

Physica A: Statistical Mechanics and its Applications, 2001, vol. 299, issue 1, 328-333

Abstract: In a recent work, we introduced two models for the dynamics of customers trying to find the business that best corresponds to their expectation for the price of a commodity. In agreement with the empirical data, a power-law distribution for the business sizes was obtained, taking the number of customers of a business as a proxy for its size. Here, we extend one of our previous models in two different ways. First, we introduce a business aggregation rate that is fitness dependent, which allows us to reproduce a spread in empirical data from one country to another. Second, we allow the bankruptcy rate to take a different functional form, to be able to obtain a log-normal distribution with power-law tails for the size of the businesses.

Keywords: Econophysics; Power-law; Aggregation-fragmentation (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:phsmap:v:299:y:2001:i:1:p:328-333

DOI: 10.1016/S0378-4371(01)00313-2

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