SITPRO International Trade Guides: Cargo Insurance
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Next, we can modify our model to account for different firm sizes. For notational convenience and
ease of exposition, we have used a continuum model. A firm hires a unit mass of consumers. The size of
the firm then becomes a normalization and hence has no bearing on the dynamics and steady-state
properties. In practice, firms hire a finite number of workers, and the law of large number becomes a
poor approximation when the firm is small. Even when a small firm draws from the same work force as
any other firm, the variance of workers’ health-care cost may be larger.
The most convenient way to...
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SITPRO International Trade Guides: Cargo Insurance
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SITPRO International Trade Guides: Cargo Insurance
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