Publication:
A statistical model of the firm
Abstract
A model of the firm is proposed that considers the firm to be a stochastic and random entity described by an action functional and the Feynman path integral. The action functional is postulated based on the profit maximization principle. The Cobb-Douglas production function and the Solow-Swan model for capital input are employed to define a specific model for the firm's action functional. An option is defined on the profit of a firm in the framework of the statistical model. The option's price can be studied empirically. A profit and loss sharing system of wages is defined as an extension of fixed wages.
Keywords
Statistical model , Firm , Profit maximization
Citation
Baaquie, Belal E. (2019). A statistical model of the firm. Physica A: Statistical Mechanics and its Applications, 524, pp. 392-411.
Publisher
Elsevier B.V.