University of Cagliari
Riprende l’iniziativa del Dipartimento di Economia e del Crenos
09 January 2009
Dipartimento di Economia e Crenos
Ciclo di Seminari
9 gennaio
S. Alfarano, University of Kiel
A statistical equilibrium approach to the distribution of firms’ profit rates
Salvo diversa indicazione, tutti i seminari avranno luogo il venerdì alle ore 12:00
presso l’Aula Magna della Facoltà di Economia in Viale Sant’Ignazio 74.
La serie di seminari è coordinata dal Prof. B. Moro e dal Prof. P. Mattana.
Nota
In ciascuna iniziativa viene rilasciato un attestato di frequenza agli studenti che
lo richiedono. Ogni 5 attestati e una breve relazione su un seminario si può
avere il riconoscimento di un credito.
Tutti i ricercatori interessati a presentare i risultati, anche parziali, delle loro ricerche
in un seminario sono invitati a prendere contatti col prof. Moro (moro@unica.it) o
col prof. Mattana (mattana@unica.it).
Abstract
The classical notion of competition rests on the idea that entrepreneurs will allocate their capital
into the most profitable sector or business activity, utilizing the average rate of profit as a
benchmark in their investment decision. We propose a statistical equilibrium model in the spirit of
Foley (1994) that interprets the tendency for competition to equalize profit rates as a dispersion
measure around an average profit rate. By means of the maximum entropy principle, the model
predicts an equilibrium distribution of profit rates which turns out to be a Subbotion or exponential
power distribution. We, then, investigate the profit rate distribution among more than a dozen
diverse US business sectors, and find that profit rates have a clearly non-Gaussian distribution,
mostly speaking in favour of the so-called Laplace distribution. The Laplace distribution is a
particular case of the more general Subbotin distribution, having previously been observed in firm
growth rates as well. The equilibrium distribution can be then derived out of a properly
constructed diffusion process, which might be used to describe the dynamics of the profit rates and
not just their equilibrium properties. The resulting process clearly indicates that the empirically
identified Laplace distribution of profit rates emerges out of the fact that the competitive pressure
acts on each firm irrespectively on its individual characteristics, which is rather counterintuitive. In
this paper we develop such theory, which leads to the an extremely simple and mathematically
elegant stochastic process which characterize the competitive firm dynamics. Interestingly, our
innovative framework can be easily extended to other macroeconomic quantities, providing with
an alternative viewpoint to analyze complex economic phenomena.
Per maggiori informazioni, siete pregati di mettervi in contatto con Prof. Moro,
telefonando al numero 070 675 3313 o via e-mail all’indirizzo moro@unica.it