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On spatial equilibria in a social interaction model

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  • Mossay, P.
  • Picard, P.M.

Abstract

Social interactions are at the essence of societies and explain the gathering of individuals in villages, agglomerations, or cities. We study the emergence of multiple agglomerations as resulting from the interplay between spatial interaction externalities and competition in the land market. We show that the geography of the spatial economy affects significantly the properties of spatial equilibria. In particular, when agents locate on an open land strip (line segment), a single city emerges in equilibrium. In contrast, when the spatial economy extends along a closed land strip (circumference), multiple equilibria with odd numbers of cities arise. Spatial equilibrium configurations involve a high degree of spatial symmetry in terms of city size and location, and can be Pareto-ranked.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Economic Theory.

Volume (Year): 146 (2011)
Issue (Month): 6 ()
Pages: 2455-2477

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Handle: RePEc:eee:jetheo:v:146:y:2011:i:6:p:2455-2477

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Web page: http://www.elsevier.com/locate/inca/622869

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Keywords: Social interaction; Multiple agglomerations; Spatial economy;

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Cited by:
  1. Yasuhiro Sato & Yves Zenou, 2013. "How Urbanization Affect Employment and Social Interactions," Discussion Papers in Economics and Business 13-32, Osaka University, Graduate School of Economics and Osaka School of International Public Policy (OSIPP).
  2. Helsley, Robert & Zenou, Yves, 2011. "Social Networks and Interactions in Cities," CEPR Discussion Papers 8260, C.E.P.R. Discussion Papers.
  3. Akamatsu, Takashi & Fujishima, Shota & Takayama, Yuki, 2014. "On Stable Equilibria in Discrete-Space Social Interaction Models," MPRA Paper 55938, University Library of Munich, Germany.
  4. Picard, Pierre M. & Tabuchi, Takatoshi, 2013. "On microfoundations of the city," Journal of Economic Theory, Elsevier, vol. 148(6), pages 2561-2582.
  5. Vincent Boitier, 2014. "Unemployment Dispersion and City Configurations: Beyond the Bid Rent Theory," Working Papers hal-00999559, HAL.

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