Grinfeld, M.; Piscitelli, L.; Cross, R. - In: Physica A: Statistical Mechanics and its Applications 287 (2000) 3, pp. 577-586
We introduce a probabilistic framework for hysteresis, a ubiquitous phenomenon in economic situations involving sunk costs. The framework is applied to a simple model of a firm's market entry/exit decisions. We study the influence of sunk cost size, width of the hysteretic loop, and of...