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The paper checks this with a seeded simulation rather than leaving it asymptotic. A competitive industry of 400 comparably sized firms (HHI = 0.0031, 321 ) and a concentrated industry of 40 Zipf-distributed firms (HHI = 0.1006, 10 ) were each run through 20,000 replicate neutral periods with no selection whatsoever operating. A reading of half a log point of apparent “selection” — the kind of magnitude an Olley-Pakes-style decomposition would report without hesitation as meaningful reallocation — occurred in 4.0 percent of neutral periods in the competitive industry and in 49.7 percent of neutral periods in the concentrated one. In an industry with an effective…
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Equation 12 · Evolutionary Economics
Selection Accounting: The Price Equation Runs the Economy
This equation gives an approximation: it relates the quantities while allowing an approximation.
The paper checks this with a seeded simulation rather than leaving it asymptotic. A competitive industry of 400 comparably sized firms (HHI = 0.0031, 321 ) and a concentrated industry of 40 Zipf-distributed firms (HHI = 0.1006, 10 ) were each run through 20,000 replicate neutral periods with no selection whatsoever operating. A reading of half a log point of apparent “selection” — the kind of magnitude an Olley-Pakes-style decomposition would report without hesitation as meaningful reallocation — occurred in 4.0 percent of neutral periods in the competitive industry and in 49.7 percent of neutral periods in the concentrated one. In an industry with an effective…