Preferential attachment and growth dynamics in complex systems
AbstractComplex systems can be characterized by classes of equivalency of their elements defined according to system specific rules. We propose a generalized preferential attachment model to describe the class size distribution. The model postulates preferential growth of the existing classes and the steady influx of new classes. According to the model, the distribution changes from a pure exponential form for zero influx of new classes to a power law with an exponential cut-off form when the influx of new classes is substantial. Predictions of the model are tested through the analysis of a unique industrial database, which covers both elementary units (products) and classes (markets, firms) in a given industry (pharmaceuticals), covering the entire size distribution. The model’s predictions are in good agreement with the data. The paper sheds light on the emergence of the exponent τ ≈ 2 observed as a universal feature of many biological, social and economic problems.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 15908.
Date of creation: 26 Jun 2004
Date of revision: 06 Feb 2006
Publication status: Published in Physical Review E 3.74(2006): pp. 0351031-0351034
Firm Growth; Pareto Distribution; Pharmaceutical Industry;
Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
- D39 - Microeconomics - - Distribution - - - Other
- L00 - Industrial Organization - - General - - - General
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
- L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
- L65 - Industrial Organization - - Industry Studies: Manufacturing - - - Chemicals; Rubber; Drugs; Biotechnology
- E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
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