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Optimal cities with indivisibility in production and interactions between firms

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  • Kanemoto, Yoshitsugu

Abstract

A spatial model of cities is constructed by combining interaction costs between firms with indivisibility in production. The optimal allocation requires Pigouvian subsidies to firms and the externality version of the Henry George Theorem is obtained: at the optimal city size, the total Pigouvian subsidy equals the total differential land rent in a city. We also obtain conditions under which monocentric configuration is optimal and perform comparative statics concerning changes in various parameters on the optimal city size.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Urban Economics.

Volume (Year): 27 (1990)
Issue (Month): 1 (January)
Pages: 46-59

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Handle: RePEc:eee:juecon:v:27:y:1990:i:1:p:46-59

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Web page: http://www.elsevier.com/locate/inca/622905

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Cited by:
  1. Berg, Nathan, 2008. "Imitation in location choice," MPRA Paper 26592, University Library of Munich, Germany.
  2. Yoshitsugu Kanemoto, 2011. "Second-Best Cost-Benefit Analysis with a Microfoundation of Urban Agglomeration," ERSA conference papers, European Regional Science Association ersa11p439, European Regional Science Association.
  3. Tripathi, Sabyasachi, 2012. "Estimating Urban Agglomeration Economies for India: A New Economic Geography Perspective," MPRA Paper 43501, University Library of Munich, Germany.
  4. John Hartwick & Andrei Bazhanov, 2007. "On Beckmann's Dispersed "Interaction City"," Working Papers, Queen's University, Department of Economics 1170, Queen's University, Department of Economics.
  5. Ito, Junichi, 2002. "Why TVES have contributed to interregional imbalances in China:," EPTD discussion papers, International Food Policy Research Institute (IFPRI) 91, International Food Policy Research Institute (IFPRI).
  6. Bazhanov, Andrei & Hartwick, John, 2006. "Dispersed Interactions of Urban Residents," MPRA Paper 766, University Library of Munich, Germany.
  7. Yoshitsugu Kanemoto, 2012. "Cost-Benefit Analysis in Monopolistic Competition Models of Urban Agglomeration," GRIPS Discussion Papers, National Graduate Institute for Policy Studies 12-04, National Graduate Institute for Policy Studies.
  8. Yoshitsugu Kanemoto, 2012. "Second-Best Cost-Benefit Analysis in Monopolistic Competition Models of Urban Agglomeration," GRIPS Discussion Papers, National Graduate Institute for Policy Studies 11-21, National Graduate Institute for Policy Studies.

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