Cyberspace and physical space in an urban economy

In this article I construct a general equilibrium urban model with cyberspace and physical space. In cyberspace, there is a virtual production sector and it produces virtual goods. On the other hand, in physical space, a physical production sector is located in the CBD and it produces physical goods. The behaviour of home and office workers is considered in a Solow and Vickrey type linear city. I derive the market equilibrium of the city by numerical simulation using specific utility and production functions. The land use pattern and the time allocation of the workers are shown. I also show the spatial structure of the telecommunications and transportation networks.