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Stability of Spatial Equilibrium


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  • Takatoshi Tabuchi

    (Faculty of Economics, University of Tokyo)

  • Dao-Zhi Zeng

    (Faculty of Economics, Kagawa University)


This paper focuses on externalities between economic agents. We consider spatial dis- tribution of economic activities in a multiregional dynamical system, where regions may be interpreted as clubs, social subgroups, species, or strategies. Our dynamics includes gravity models and replicator dynamics as special cases. Assuming that other variables, such as prices are solved as a function of the population distribution, we analyze both interior and corner equilibria of spatial distribution in a general class of dynamics, including the replicator dynamics and the gravity model. We derive the exact conditions for stable equilibrium and give some interpretations of the stability conditions. We show that interior equilibria are stable in the presence of strong agglomeration economies, but unstable in the presence of strong congestion diseconomies.

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Bibliographic Info

Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number CIRJE-F-79.

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Length: 29 pages
Date of creation: Jul 2000
Date of revision:
Handle: RePEc:tky:fseres:2000cf79

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