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TOPIC:
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SALES AND MARKUP DISPERSION: THEORY AND EMPIRICS
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ABSTRACT
We derive exact conditions relating the distributions of fi rm productivity, sales, output, and markups to the form of demand; in particular, for a large family (including Pareto, log-normal, and Frechet), the distributions of productivity and output are the same if and only if demand is "CREMR" (Constant Revenue Elasticity of Marginal Revenue). We then use the Kullback-Leibler Divergence to quantify the information loss when a predicted distribution fails to match the actual one; and we find that, to explain sales and markups, the choice between Pareto and log-normal productivity distributions matters less than the choice between CREMR and other demands.
Keywords: CREMR Demands; Heterogeneous Firms; Kullback-Leibler Divergence; Log-Normal Distribution; Pareto Distribution.
JEL Classi cation: F15, F23, F12
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Click here to view the CV.
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PRESENTER
Mathieu Parenti
Universite Libre de Bruxelles
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RESEARCH FIELDS
International Trade
Industrial Organization
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DATE:
10 Apr 2017 (Monday)
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TIME:
4pm - 5.30pm
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VENUE:
Meeting Room 5.1, Level 5
School of Economics
Singapore Management University
90 Stamford Road
Singapore 178903
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