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Business size distributions

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  • D'Hulst, R.
  • Rodgers, G.J.

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.

Suggested Citation

  • D'Hulst, R. & Rodgers, G.J., 2001. "Business size distributions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 299(1), pages 328-333.
    • Handle: RePEc:eee:phsmap:v:299:y:2001:i:1:p:328-333
    DOI: 10.1016/S0378-4371(01)00313-2
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    References listed on IDEAS

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    6. R. D'Hulst & G. J. Rodgers, 2000. "Models for the size distribution of businesses in a price driven market," Papers nlin/0008018, arXiv.org, revised Mar 2001.
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    Cited by:

    1. Hernández-Pérez, R. & Angulo-Brown, F. & Tun, Dionisio, 2006. "Company size distribution for developing countries," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 359(C), pages 607-618.
    2. Noell, Christian, 2006. "Self-Organization in Agricultural Sectors and the Relevance of Complex Systems Approaches for Applied Economics," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25516, International Association of Agricultural Economists.
    3. Touzani, Samir & Van Buskirk, Robert, 2016. "Estimating sales and sales market share from sales rank data for consumer appliances," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 451(C), pages 266-276.
    4. Hernández-Pérez, R., 2010. "An analogy of the size distribution of business firms with Bose–Einstein statistics," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 389(18), pages 3837-3843.

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