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

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  • Anindya S. Chakrabarti

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.

Suggested Citation

  • Anindya S. Chakrabarti, 2013. "Bimodality in the firm size distributions: a kinetic exchange model approach," Papers 1302.3818, arXiv.org, revised May 2013.
  • Handle: RePEc:arx:papers:1302.3818
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    References listed on IDEAS

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    Cited by:

    1. Ghosh, Asim & Chatterjee, Arnab & Inoue, Jun-ichi & Chakrabarti, Bikas K., 2016. "Inequality measures in kinetic exchange models of wealth distributions," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 451(C), pages 465-474.

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