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On the Optimality of Central Places

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  • Quinzii, Martine
  • Thisse, Jacques-Francois

Abstract

A model of consumer multipurpose shopping is used for studying the optimality of central places. There are two different commodities sold by two different types of firms. The shopping frequencies are exogenously given and different for the two commodities. Consumers can group their purchases of the two commodities in order to reduce transport costs. It is shown that the socially optimal configuration of firms always involves the clustering of a firm type 2 (low purchase frequency) with a firm of type 1 (high purchase frequency), assuming that the number of firms of type 2 is smaller than the number of firms of type 1. Copyright 1990 by The Econometric Society.

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Bibliographic Info

Article provided by Econometric Society in its journal Econometrica.

Volume (Year): 58 (1990)
Issue (Month): 5 (September)
Pages: 1101-19

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Handle: RePEc:ecm:emetrp:v:58:y:1990:i:5:p:1101-19

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Cited by:
  1. Gilles Duranton, 1997. "La nouvelle économie géographique : agglomération et dispersion," Économie et Prévision, Programme National Persée, vol. 131(5), pages 1-24.
  2. Arthur Huang & David Levinson, 2011. "Why retailers cluster: an agent model of location choice on supply chains," Environment and Planning B: Planning and Design, Pion Ltd, London, vol. 38(1), pages 82-94, January.
  3. Tabuchi, Takatoshi & Thisse, Jacques-François, 2011. "A new economic geography model of central places," Journal of Urban Economics, Elsevier, vol. 69(2), pages 240-252, March.
  4. Tabuchi, Takatoshi, 2009. "Self-organizing marketplaces," Journal of Urban Economics, Elsevier, vol. 66(3), pages 179-185, November.
  5. Wen-Tai Hsu & Tomoya Mori & Tony E. Smith, 2014. "Spatial Patterns and Size Distributions of Cities," KIER Working Papers 882, Kyoto University, Institute of Economic Research.

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