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Bimodality in the firm size distributions: a kinetic exchange model approach

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Abstract

Firm growth process in the developing economies is known to produce divergence in their growth path giving rise to bimodality in the size distribution. Similar bimodality has been observed in wealth distribution as well. Here, we introduce a modified kinetic exchange model which can reproduce such features. In particular, we will show numerically that a nonlinear retention rate (or savings propensity) causes this bimodality. This model can accommodate binary trading as well as the whole system-side trading thus making it more suitable to explain the non-standard features of wealth distribution as well as firm size distribution.

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Authors and Affiliations

  1. Economics Department, Boston University, 270 Bay State Road, Boston, MA-02215, USA

    Anindya S. Chakrabarti

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  1. Anindya S. Chakrabarti
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Correspondence to Anindya S. Chakrabarti.

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Chakrabarti, A. Bimodality in the firm size distributions: a kinetic exchange model approach. Eur. Phys. J. B 86, 255 (2013). https://doi.org/10.1140/epjb/e2013-40114-4

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  • DOI: https://doi.org/10.1140/epjb/e2013-40114-4

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