The size distribution of businesses, part I: a benchmark case

This paper examines the evolution of a skew distribution of firm sizes from the viewpoint of the 'Bounds' approach to market structure. It confines attention to the role played by non-strategic factors (statistical independence, and cost sideeffects). A model is proposed, which leads to a prediction regarding the least skew size distribution which is likely to be observed. This distribution provides a benchmark relative to which the impact of strategic effects on the form of the size of distribution may be assessed.