  By comparing the PSCz galaxy power spectrum with the results of nested pure
dark matter N-body simulations, we try to understand how infrared-selected
galaxies populate dark-matter haloes, paying special attention to the method of
halo identification in the simulations. We thus test the hypothesis that
baryonic physics negligibly affects the distribution of galaxies down to the
smallest scales yet observed. We are successful in reproducing the PSCz power
spectrum on scales < ~40 h/Mpc, near our resolution limit, by imposing a
central density cut-off on simulated haloes, which gives a rough minimum mass
and circular velocity of haloes in which PSCz galaxies formed.
