MARC Record from Library of Congress

LEADER: 01916cam a22002777a 4500
001 2006623330
003 DLC
005 20130601093451.0
007 cr |||||||||||
008 070104s2006 mnu sb f000 0 eng
010 $a 2006623330
040 $aDLC$cDLC
050 00 $aHB1
100 1 $aLuttmer, Erzo Gerrit Jan,$d1964-
245 10 $aConsumer search and firm growth$h[electronic resource] /$cErzo G.J. Luttmer.
260 $a[Minneapolis, MN] :$bFederal Reserve Bank of Minneapolis, Research Dept.,$c[2006]
490 0 $aWorking paper / Federal Reserve Bank of Minneapolis, Research Dept. ;$v645
538 $aSystem requirements: Adobe Acrobat Reader.
538 $aMode of access: World Wide Web.
500 $aTitle from PDF file (viewed on Jan. 4, 2007).
500 $a"October 2006."
530 $aAlso available in print.
520 3 $aThis paper presents a simple model of search and matching between consumers and firms. The firm size distribution has a Pareto-like right tail if the population of consumers grows at a positive rate and the mean rate at which incumbent firms gain customers is also positive. This happens in equilibrium when entry is sufficiently costly. As entry costs grow without bound, the size distribution approaches Zipf's law. The slow rate at which the right tail of the size distribution decays and the 10% annual gross entry rate of new firms observed in the data suggest that more than a third of all consumers must switch from one firm to another during a given year. A substantially lower consumer switching rate can be inferred only if part of the observed firm entry rate is attributed to factors outside the model. The realized growth rates of large firms in the model are too smooth.
504 $aIncludes bibliographical references.
710 2 $aFederal Reserve Bank of Minneapolis.$bResearch Department.
856 40 $uhttp://minneapolisfed.org/research/wp/wp645.pdf