We argue that the complex interactions of competitive heterogeneous firms lead to a statistical equilibrium distribution of firms' profit rates, which turns out to be an exponential power (or Subbotin) distribution. Moreover, we construct a diffusion process that has the Subbotin distribution as...

The paper analyses the properties and outcomes of competitive dynamics in industries characterized by heterogeneous firms and continuing stochastic entry. A formal analytical apparatus is developed, able to derive some generic properties of the underlying competition process combining persistent...