Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/83390
Authors: 
Marko, Peter
Švarc, Petr
Year of Publication: 
2008
Series/Report no.: 
IES Working Paper 31/2008
Abstract: 
In this article we extend the agent-based model of firms' formation and growth proposed in [4]. In [4] the firms' creation, expansion or contraction results from the interaction of heterogeneous utility maximizers. While the original model was able to replicate the power law distribution in the firms' sizes agents in the model set their utility maximizing effort levels completely freely and undetected. This led to the emergence of free riding and influenced the overall dynamics of the model. Therefore we decided to extend the original model by introducing the monitoring which is seen in the economic literature, besides for example the proper incentive scheme ([18]), as a possible way how to make employees work harder. Our motivation is to compare the extended model with both to the original case without monitoring and empirical data about firms' sizes distribution.
Subjects: 
monitoring
firms' size
power law
agent-based model
simulation
heterogeneous agents
JEL: 
L11
C15
C16
Document Type: 
Working Paper
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