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A game-theoretic analysis of skyscrapers

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  • Helsley, Robert W.
  • Strange, William C.

Abstract

Skyscrapers are urbanism in the extreme, but they have received surprisingly little direct attention in urban economics. The standard urban model emphasizes differentials in access across locations, which determine land price differentials and building heights. This explanation leaves out an important force that appears to have historically influenced skyscraper construction: an inherent value placed on being the tallest. In this paper, we present a game-theoretic model of skyscraper development that captures this additional force. The model predicts dissipative competition over the prize of being tallest, a prediction consistent with the historical record. The paper discusses the implications of this result for the nature and efficiency of urban development and for the operation of urban real estate markets.

Suggested Citation

  • Helsley, Robert W. & Strange, William C., 2008. "A game-theoretic analysis of skyscrapers," Journal of Urban Economics, Elsevier, vol. 64(1), pages 49-64, July.
    • Handle: RePEc:eee:juecon:v:64:y:2008:i:1:p:49-64
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    References listed on IDEAS

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    1. Arthur M. Sullivan, 1991. "Tall buildings on cheap land: Building heights and intrabuilding travel costs," Journal of Urban Economics, Elsevier, vol. 29(3), pages 310-328, May.
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    5. Brueckner, Jan K., 1980. "A vintage model of urban growth," Journal of Urban Economics, Elsevier, vol. 8(3), pages 389-402, November.
    6. Robert W. Helsley & William C. Strange, 2007. "Urban interactions and spatial structure," Journal of Economic Geography, Oxford University Press, vol. 7(2), pages 119-138, March.
    7. Grimaud, A., 1989. "Agglomeration economies and building height," Journal of Urban Economics, Elsevier, vol. 25(1), pages 17-31, January.
    8. Rosenthal, Stuart S. & Strange, William C., 2004. "Evidence on the nature and sources of agglomeration economies," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 49, pages 2119-2171, Elsevier.
    9. Helsley, Robert W. & Strange, William C., 1994. "City formation with commitment," Regional Science and Urban Economics, Elsevier, vol. 24(3), pages 373-390, June.
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    Citations

    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Skyscrapers and Cities: A Q&A Interview with Edward Glaeser (Part I)
      by Jason Barr in Skynomics Blog on 2018-09-05 12:06:05
    2. The Economics of Skyscraper Height (Part II)
      by Jason Barr in Skynomics Blog on 2019-01-03 13:59:59
    3. The Economics of Skyscraper Height (Part III)
      by Jason Barr in Skynomics Blog on 2019-01-21 14:01:34
    4. The Technology of Tall (Part III): Getting to the Core
      by Jason Barr in Skynomics Blog on 2019-10-23 12:27:08
    5. Skyscraper Bottlenecks (Part I): The Elevator
      by Jason Barr in Skynomics Blog on 2020-02-10 13:28:15
    6. Boon or Boondoggle? The Long Run Economics of the Empire State Building
      by Jason Barr in Skynomics Blog on 2020-08-17 12:28:49
    7. Why Doesn’t New York Construct the World’s Tallest Building Anymore?
      by Jason Barr in Skynomics Blog on 2020-12-23 13:17:41
    8. Clouds in Your Coffee? Skyscrapers and their Symbolic Heights
      by Jason Barr in Skynomics Blog on 2021-01-20 13:17:39

    Citations

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    Cited by:

    1. Valentina Antoniucci & Giuliano Marella, 2014. "Torri incompiute: i costi di produzione della rigenerazione urbana in contesti ad alta densità," SCIENZE REGIONALI, FrancoAngeli Editore, vol. 2014(3), pages 117-124.
    2. Michael Baye & Dan Kovenock & Casper Vries, 2012. "Contests with rank-order spillovers," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(2), pages 315-350, October.
    3. Jason Barr, 2013. "Skyscrapers And Skylines: New York And Chicago, 1885–2007," Journal of Regional Science, Wiley Blackwell, vol. 53(3), pages 369-391, August.
    4. Jason Barr, 2010. "Skyscrapers and the Skyline: Manhattan, 1895–2004," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 38(3), pages 567-597, September.
    5. Arvydas Jadevicius, 2016. "Skyscraper indicator and its application in the UK," Entrepreneurial Business and Economics Review, Centre for Strategic and International Entrepreneurship at the Cracow University of Economics., vol. 4(2), pages 37-49.
    6. Nestor Garza & Colin Lizieri, 2012. "Skyscrapers and the economy," ERSA conference papers ersa12p414, European Regional Science Association.
    7. Federico Curci, 2015. "The taller the better? Agglomeration determinants and urban structure," ERSA conference papers ersa15p991, European Regional Science Association.
    8. Jason Barr, 2012. "Skyscraper Height," The Journal of Real Estate Finance and Economics, Springer, vol. 45(3), pages 723-753, October.
    9. Liu, Crocker H. & Rosenthal, Stuart S. & Strange, William C., 2020. "Employment density and agglomeration economies in tall buildings," Regional Science and Urban Economics, Elsevier, vol. 84(C).
    10. Koster, Hans R.A. & Rietveld, Piet & van Ommerren, Jos N., 2011. "Is the sky the limit? an analysis of high-rise office buildings," LSE Research Online Documents on Economics 58467, London School of Economics and Political Science, LSE Library.
    11. Ahlfeldt, Gabriel M. & Pietrostefani, Elisabetta, 2019. "The economic effects of density: A synthesis," Journal of Urban Economics, Elsevier, vol. 111(C), pages 93-107.
    12. Ilir Nase & Nick van Assendelft & Hilde Remøy, 2019. "Rent Premiums and Vertical Sorting in Amsterdam’s Multi-Tenant Office Buildings," The Journal of Real Estate Finance and Economics, Springer, vol. 59(3), pages 419-460, October.
    13. Hanlon, W.Walker & Heblich, Stephan, 2022. "History and urban economics," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    14. Jason Barr & Jingshu Luo, 2021. "Growing Skylines: The Economic Determinants of Skyscrapers in China," The Journal of Real Estate Finance and Economics, Springer, vol. 63(2), pages 210-248, August.
    15. Jayson Danton & Alexander Himbert, 2017. "Residential Vertical Rent Gradients in the City," Cahiers de Recherches Economiques du Département d'économie 17.11, Université de Lausanne, Faculté des HEC, Département d’économie.
    16. Prashant Das & Patrick Smith & Paul Gallimore, 2018. "Pricing Extreme Attributes in Commercial Real Estate: the Case of Hotel Transactions," The Journal of Real Estate Finance and Economics, Springer, vol. 57(2), pages 264-296, August.
    17. Liu, Crocker H. & Rosenthal, Stuart S. & Strange, William C., 2018. "The vertical city: Rent gradients, spatial structure, and agglomeration economies," Journal of Urban Economics, Elsevier, vol. 106(C), pages 101-122.
    18. Ahlfeldt, Gabriel M. & Barr, Jason, 2022. "Viewing urban spatial history from tall buildings," Regional Science and Urban Economics, Elsevier, vol. 94(C).
    19. Jason Barr & Jennifer Johnson, 2020. "Skyscrapers and the Happiness of Cities," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 46(2), pages 344-377, April.
    20. Ahlfeldt, Gabriel M. & Pietrostefani, Elisabetta, 2019. "The economic effects of density: A synthesis," Journal of Urban Economics, Elsevier, vol. 111(C), pages 93-107.
    21. Lin, Jinyao & Lu, Siyan & He, Xiaoyu & Wang, Fang, 2021. "Analyzing the impact of three-dimensional building structure on CO2 emissions based on random forest regression," Energy, Elsevier, vol. 236(C).
    22. Hans R. A. Koster & Jos Ommeren & Piet Rietveld, 2014. "Agglomeration Economies and Productivity: A Structural Estimation Approach Using Commercial Rents," Economica, London School of Economics and Political Science, vol. 81(321), pages 63-85, January.
    23. Jason Barr & Bruce Mizrach & Kusum Mundra, 2015. "Skyscraper height and the business cycle: separating myth from reality," Applied Economics, Taylor & Francis Journals, vol. 47(2), pages 148-160, January.

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