We formulate a master equation which includes all the modes of a unidirectional ring cavity. This equation holds for small absorption and transmission, with arbitrary ratio of absorption over transmission. Within this limit, this many-mode master equation provides an ideal tool to study fluctuations in laser-type systems in general, and in optical bistability (both absorptive and dispersive) in particular. The dissipative terms for the modes are derived exactly from the boundary condition of the problem. Neglecting all the modes except the resonant one, this equation reduces to the well known quantum statistical mean field model. At a semiclassical level the master equation produces a new set of propagation equations, which are equivalent to the Maxwell-Bloch equations in the aforesaid limit. These equations are very well suitable to describe the self-pulsing behavior in laser systems, as well as the many-mode master equation is suitable to give a quantum statistical description of this phenomenon.
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