A Statistical Equilibrium Model of Competitive Firms

Arbeitspapier

We argue that the complex interactions of competitive heterogeneous firms lead to a statistical equilibrium distribution of firms? profit rates, which turns out to be an exponential power (or Subbotin) distribution. Moreover, we construct a diffusion process that has the Subbotin distribution as its stationary probability density, leading to a phenomenologically inspired interpretation of variations in the shape parameter of the statistical equilibrium distribution. Our main finding is that firms? idiosyncratic efforts and the tendency for competition to equalize profit rates are two sides of the same coin.

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• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Economics Working Paper ; No. 2008-10

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Firm Behavior: Theory ; General Aggregative Models: General ; Market Structure, Firm Strategy, and Market Performance: General
• Thema: Statistical equilibrium ; maximum entropy principle ; diffusion process ; stochastic differential equation ; competition ; profit rate ; Gewinn ; Statistische Verteilung ; Wettbewerb ; Gleichgewicht ; Entropie ; Stochastischer Prozess ; Industrieökonomik ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Irle, Albrecht ; Milaković, Mishael ; Alfarano, Simone ; Kauschke, Jonas
• Ereignis: Veröffentlichung
• (wer): Kiel University, Department of Economics
• (wo): Kiel
• (wann): 2008

Weitere Informationen

• Handle: http://hdl.handle.net/10419/22055