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Optimum and Market Equilibrium in a Model of a City without a Predetermined Center

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  • E Borukhov
  • O Hochman

Abstract

Most of the recent theoretical literature on the internal structure of cities has assumed that a city is organized around a predetermined center, and that all traffic in the city is oriented toward that point. This is an oversimplification. It is not correct that all traffic in modern cities either goes to the center or comes from the center. In this paper we assume that every individual travels to every location in the city. The individuals choose locations that minimize the sum of their transportation and housing expenditures. Results are obtained for a social optimization and for a competitive equilibrium. In both cases there is a center where the density and land prices are higher; the density decreases with distance from this center. The optimal city is more dense than the ‘competitive’ one owing to externalities which are not taken into account in the latter case.

Suggested Citation

  • E Borukhov & O Hochman, 1977. "Optimum and Market Equilibrium in a Model of a City without a Predetermined Center," Environment and Planning A, , vol. 9(8), pages 849-856, August.
    • Handle: RePEc:sae:envira:v:9:y:1977:i:8:p:849-856
    DOI: 10.1068/a090849
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    Cited by:

    1. SAITO Yukiko, 2013. "Role of Hub Firms in Geographical Transaction Network," Discussion papers 13080, Research Institute of Economy, Trade and Industry (RIETI).
    2. Zenou, Yves, 1999. "Urban Unemployment and City Formation. Theory and Policy Implications," Seminar Papers 662, Stockholm University, Institute for International Economic Studies.
    3. Andre de Palma & Yorgos Y. Papageorgiou, 1989. "Toward an Endogenous Central Place Theory," Discussion Papers 828, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    4. Zenou, Yves, 2000. "Urban unemployment, agglomeration and transportation policies," Journal of Public Economics, Elsevier, vol. 77(1), pages 97-133, July.
    5. Jose Noguera, 2000. "Barter Economies and Centralized Merchants," CERGE-EI Working Papers wp162, The Center for Economic Research and Graduate Education - Economics Institute, Prague.
    6. NAKAJIMA Kentaro & SAITO Yukiko & UESUGI Iichiro, 2013. "Role of Inter-firm Transactions on Industrial Agglomeration: Evidence from Japanese firm-level data," Discussion papers 13021, Research Institute of Economy, Trade and Industry (RIETI).
    7. Berliant, Marcus & Konishi, Hideo, 2000. "The endogenous formation of a city: population agglomeration and marketplaces in a location-specific production economy," Regional Science and Urban Economics, Elsevier, vol. 30(3), pages 289-324, May.
    8. Topa, Giorgio & Zenou, Yves, 2015. "Neighborhood and Network Effects," Handbook of Regional and Urban Economics, in: Gilles Duranton & J. V. Henderson & William C. Strange (ed.), Handbook of Regional and Urban Economics, edition 1, volume 5, chapter 0, pages 561-624, Elsevier.
    9. Robert E. Lucas, Jr., 2001. "Externalities and Cities," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 4(2), pages 245-274, April.
    10. Duranton, Gilles & Puga, Diego, 2004. "Micro-foundations of urban 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 48, pages 2063-2117, Elsevier.
    11. Akamatsu, Takashi & Fujishima, Shota & Takayama, Yuki, 2014. "On Stable Equilibria in Discrete-Space Social Interaction Models," MPRA Paper 55938, University Library of Munich, Germany.
    12. Masahisa Fujita, 2010. "The Evolution Of Spatial Economics: From Thünen To The New Economic Geography," The Japanese Economic Review, Japanese Economic Association, vol. 61(1), pages 1-32, March.
    13. MORI Tomoya, 2018. "Spatial Pattern and City Size Distribution," Discussion papers 18053, Research Institute of Economy, Trade and Industry (RIETI).
    14. Esteban Rossi-Hansberg, 2004. "Optimal Urban Land Use and Zoning," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 7(1), pages 69-106, January.
    15. Jorge Andrés Talero Bernal, 2015. "Determinantes del precio del suelo como variable proxy de las preferencias idiosincráticas de los individuos en un marco teórico de equilibrio general," Revista CIFE, Universidad Santo Tomás, February.
    16. John Polimeni, 2005. "Simulating Agricultural Conversion to Residential use in the Hudson River Valley: Scenario Analyses and Case Studies," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 22(4), pages 377-393, December.
    17. Akio Kishi & Tatsuhito Kono & Yoshitaka Nozoe, 2015. "Location of Retail Stores in City Center and Outskirts under Spatial Price Competition: Improvements in Radial and Ring Roads," The Review of Regional Studies, Southern Regional Science Association, vol. 45(2), pages 173-194, Fall.
    18. Akamatsu, Takashi & Fujishima, Shota & Takayama, Yuki, 2017. "Discrete-space agglomeration model with social interactions: Multiplicity, stability, and continuous limit of equilibria," Journal of Mathematical Economics, Elsevier, vol. 69(C), pages 22-37.
    19. OTAZAWA Toshimori & OHIRA Yuki & Jos VAN OMMEREN, 2018. "Inter-firm Transaction Networks and Location in a City," Discussion papers 18054, Research Institute of Economy, Trade and Industry (RIETI).
    20. Tse, Chung-Yi, 2010. "Thick market externalities in a spatial model," Regional Science and Urban Economics, Elsevier, vol. 40(2-3), pages 92-105, May.
    21. Takatoshi Tabuchi, 2011. "City Formation and Transport Costs," Chapters, in: André de Palma & Robin Lindsey & Emile Quinet & Roger Vickerman (ed.), A Handbook of Transport Economics, chapter 6, Edward Elgar Publishing.

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