@article{Sun2020, 
author = {Xiao Sun and Jun Qian and Yueting Chai and Yi Liu},
title = {Analysis of a Firm’s Optimal Size Based on Accessible Market Capacity},
year = {2020},
journal = {Tsinghua Science and Technology},
volume = {25},
number = {5},
pages = {659-667},
keywords = {accessible market capacity, management cost, firm size, evolution},
url = {https://www.sciopen.com/article/10.26599/TST.2019.9010053},
doi = {10.26599/TST.2019.9010053},
abstract = {E-commerce has dramatically reduced the limitation of space and time on economic activities, resulting in individuals having access to a huge number of consumers. In this paper, we propose a company’s optimal size decision model containing management costs as a means of investigating the evolution of the company size in e-commerce. Given that production decisions are made based on accessible market capacity, we explain how a company enters the market, and we draw an evolutionary path of the optimal company size. The results show that in the early expansion stage of accessible market capacity, a firm’s optimal size keeps increasing; after reaching a peak, the change in a firm’s optimal size depends on its cost management. When the accessible market capacity reaches a threshold, the firm will no longer be in the market, and may no longer exist. Finally, we construct a simulation framework based on complex adaptive systems to validate our proposed model. A simulation experiment confirms our model and reveals the dynamic co-evolution process of individual producers and firms.}
}