Mathematical Digest

Short Summaries of Articles about Mathematics
in the Popular Press

"Firm sizematters," by Philip Ball. Nature Science Update, 7 September 2001.

Philip Ball writes of work done by Robert Axtell of the Brookings Institutionregarding the distribution of the sizes of the 5.5 million firms in the U.S.In a working paper titled "The emergence of firms in a population of agents:local increasing returns, unstable Nash equilibria, and power law sizedistributions," Axtell claims that U.S. firm sizes follow a Zipf distributionand explains why. A perhaps surprising conclusion by Axtell, related to hismodel, is that the largest and longest-living U.S. firms are not the mostprofitable but are those that have the most productive workers. The work alsois published in the 7 September issue of Science (p. 1818) and summarized in the same issue in "Firm Numbers" (p. 1725).

--- Mike Breen