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— In the preceding paper [1] we presented empirical results describing the growth of publicly-traded United States manufacturing firms within the years 1974-1993. Our results suggest that the data can be described by a scaling approach. Here, we propose models that may lead to some insight into these phenomena. First, we study a model in which the growth(More)
We develop an integrated real options and industrial organization framework to quantify the strategic option value of technology investments. Strategic investments (e.g., R&D, capacity expansion or strategic acquisitions) are difficult to analyze based on standard approaches. Yet, it is these decisions that determine a firm's competitive success in a(More)
We address the question of the growth of firm size. To this end, we analyze the Compustat data base comprising all publicly-traded United States manufacturing firms within the years 1974–1993. We find that the distribution of firm sizes remains stable for the 20 years we study, i.e., the mean value and standard deviation remain approximately constant. We(More)
We study the dynamics of a system composed of interacting units each with a complex internal structure comprising many subunits and treat the case in which each subunit grows in a multiplicative manner. We propose a model for such systems in which the interaction among the units is treated in a mean field approximation and the interaction among subunits is(More)
This article discusses some of the similarities between work being done by economists and by physicists seeking to contribute to economics. We also mention some of the differences in the approaches taken and seek to justify these different approaches by developing the argument that by approaching the same problem from different points of view, new results(More)
We illustrate the general principle that in biophysics, econophysics and possibly even city growth, the conceptual framework provided by scaling and universality may be of use in making sense of complex statistical data. Specifically, we discuss recent work on DNA sequences, heartbeat intervals, avalanche-like lung inflation, urban growth, and company(More)
Motivated by recent empirical studies of business firm growth, we develop a dynamic percolation model which captures some of the features of the economical system--i.e., merging and splitting of business firms--represented as aggregates on a d-dimensional lattice. We find the steady-state distribution of the aggregate size and explore how this distribution(More)
Whether the firms that supply Internet hardware and software should face restrictions on the use of their property is an important and controversial policy issue. Advocates of ―net neutrality‖— including President Obama and the current FCC majority—believe that owners of broadband distribution systems (hardware used to distribute Internet and video(More)