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Yes, this was just some of the work that Simon did to build a compelling
case for a nobel prize in economics. Not only were firms distributed in an
extreme scale free manner, but he did not miss the opportunity to point out
that this was just another indication ("proof") that the traditional (i.e.,
Chicago) neo-classical economic view of the world was wrong. According to
the rational view of the firm, firms are supposed to seek an optimal size
level, dependent solely on the rational calculation of when marginal costs
of coordination exceed marginal benefits of cost savings from size. But,
if this were true, we would observe a distribution of firms much closer to
normal, with the peak occuring at optimal levels. He went on to write with
Ijiri several extensions of the importance of this line of work, including
the following (both available online in JSTOR):
Ijiri, Y., & Simon, H.A. (1964). Business firm growth and size. American
Economic Review, 54, 77-89.
and Ijiri, Y., & Simon, H.A. (1967). A model of business firm growth.
Econometrika, 35, 348-355.
They also have a book out on this, but that is not available online.
There is a nice recent article by Bob Axtell in Science, also available in
JSTOR, summarizing and showing how scale free these firm sizes really are:
Axtell, Robert (2001). Zipf distribution of US firm size. Science, 298:
--On Tuesday, January 28, 2003 6:06 PM -0600 Doug Bryan
<[log in to unmask]> wrote:
> ***** To join INSNA, visit http://www.sfu.ca/~insna/ *****
> I've heard that Simon published a scale-free model 45 years ago when he
> was studying firm sizes, but I haven't read the paper. It's:
> Herbert Simon (1955) ?On a class of skew distribution functions,?
> Biometrika, 42:425-440.
> Does anyone by chance have a softcopy?
> Doug Bryan
> [log in to unmask]
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