Modelling the dynamics of industry populations

This paper examines four models which might be used to account for variatio ns in the number of producers who operate in a particular market over the l ifetime of that market. Two of these are standard economics textbook models , one is a non-standard model and one is a textbook model derived from the literature on organizational ecology. The four models have several observab le differences and this opens up the possibility of testing any one against the others. We apply these four models to 93 years of data on the populati on of domestic car producers in the US car industry. The salient feature of this population is the very large rise and fall in the number of firms ope rating in the very early years of the industry, a phenomena which seems har d to account for using any of the three textbook models that we consider he re. (C) 2001 Elsevier Science B.V. All rights reserved.