Business size distributions

D’hulst, Reinhilde; Rodgers, G. J.

doi:10.1016/s0378-4371(01)00313-2

Cited by 6 publications

(3 citation statements)

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“…Complex systems are said to self‐organize into a critical state of higher reactivity, go through a phase change, “relax” into a less reactive state and then start again to develop into a critical state, and so on. Per Bak (Bak, 1997) proposed an idealized model of a sand pile as a visual aid to demonstrate this phenomenon that has also been empirically investigated in real‐world economic systems (D'Hulst and Rodgers, 2001; Mildenberger, 1998; Ormerod, 2002; Ormerod and Mounfields, 2001, 2002; Ponzi and Aizawa, 2000). SOC is generally accepted in complex systems theory nowadays, and has shown its usefulness in many scientific and practical areas (Bak, 1997; Jensen, 1998).…”

Section: The Mechanism Of Complexity: “Self‐organized Criticality”mentioning

confidence: 99%

“…In recent economic literature evidence of PLD in all parts of the economy has been presented: “They [power law distributions] are indicative of correlated, cooperative phenomena between groups of interacting agents at the microscopic level” (Ormerod and Mounfield, 2001, p. 573). PLD of business sizes were investigated by D'Hulst and Rodgers (2001), Ormerod (2002) identified them in U.S. business cycles, Ormerod and Mounfield (2002) in European business cycles, whereas Ponzi and Aizawa (2000) report about PLD in financial market models; various other authors have found them in stock markets.…”

Section: Self‐organized Criticality In Economic Systems: the Case mentioning

confidence: 99%

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A look into the nature of complex systems and beyond “Stonehenge” economics: coping with complexity or ignoring it in applied economics?

Noell¹

2007

Agricultural Economics

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Real-world economic systems are complex in general but can be approximated by the "open systems" approach. Economic systems are very likely to possess the basic and advanced emergent properties (e.g., self-organized criticality, fractals, attractors) of general complex systems. The theory of "self-organized criticality" is proposed as a major source of dynamic equilibria and complexity in economic systems. This is exemplified in an analysis for self-organized criticality of Danish agricultural subsectors, indicated by power law distributions of the monetary production value for the time period from 1963 to 1999. Major conclusions from the empirical part are: (1) The sectors under investigation are obviously self-organizing and thus very likely to show a range of complex properties. (2) The characteristics of the power law distributions that were measured might contain further information about the state or graduation of self-organization in the sector. Varying empirical results for different agricultural sectors turned out to be consistent with the theory of self-organized criticality. (3) Fully self-organizing sectors might be economically the most efficient. Finally, empirical implications of the results are discussed. Complexity theory should be considered as a valuable supplement to the existing analytical toolbox. JEL classification: B52have an influence on structures and outcomes of future interactions. The characteristics and interactions of the individual agents (producers, traders, consumers, policy makers, and institutions) organize and shape over time as rather stable but by no means static economic structures that behave according to constantly evolving and changing rules. In terms of modern systems theory we say that under such circumstances system elements (economic agents in our case), their interactions, and the forces of self-organization form a complex system. Prominent economists such as , to name but a few, have pointed this out throughout the history of economic thought. The interested reader might refer to the works of Brian and others about the relation between complexity and economic theory.Complex systems are radically different from deterministic systems approaches and also significantly different from cybernetic systems, because interactions between system elements

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Section: The Mechanism Of Complexity: “Self‐organized Criticality”mentioning

confidence: 99%

Section: Self‐organized Criticality In Economic Systems: the Case mentioning

confidence: 99%

A look into the nature of complex systems and beyond “Stonehenge” economics: coping with complexity or ignoring it in applied economics?

Noell¹

2007

Agricultural Economics

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“…One approach to the study of firm size distribution is based on the analysis of firm rankings, focused on the statistical properties of firm rankings, where the cumulative distribution function (CDF) for sizes is often obtained, the main result being that the CDF is very close to a power law (or to a modified power law [6,8]), and that this distribution holds for different proxies for size, diverse time spans and different countries [3][4][5][6][8][9][10][11].…”

Section: Introductionmentioning

confidence: 99%