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Cities in Competition, Characteristic Time, and Leapfrogging Developers

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  • Dani Broitman
  • Daniel Czamanski

Abstract

In a recent paper Czamanski and Roth (2011 Annals of Regional Science 46 101–118) demonstrated that, because the profitability of construction projects is influenced by variations in the time incidence of costs and revenues, despite declining willingness to pay and land gradients with distance from central business districts, profitability can experience local maxima away from urban centers. The time until the realization of revenues was termed ‘characteristic time’. Its size is the result of planning polices and can lead to leapfrogging and scattered development, especially when interest rates are low or negligible. We explained this result by modeling the simple behavior of developers in the context of a single linear city. In this paper we consider the case of two municipalities with different development policies and characteristic time functions. We explore local maxima in profitability, typical of disequilibrium situations, especially during periods when cities are growing. Myopic assumptions, in the sense that each city is interested only in what happens on its side of the municipal boundary, can easily lead to unintended leapfrogging. Competition between cities can result in intentional leapfrogging or in spatially concentrated development, depending on the policy objectives. We extend the analysis further and consider qualitatively different cities that give rise to different gravity-type forces and differences in willingness to pay. The demand and supply sides of the building market are integrated into the model. The additional considerations can lead to various patterns of scattered development capable of explaining the spatial structure of metropolitan areas.

Suggested Citation

  • Dani Broitman & Daniel Czamanski, 2012. "Cities in Competition, Characteristic Time, and Leapfrogging Developers," Environment and Planning B, , vol. 39(6), pages 1105-1118, December.
  • Handle: RePEc:sae:envirb:v:39:y:2012:i:6:p:1105-1118
    DOI: 10.1068/b37073
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    References listed on IDEAS

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    1. Fujita,Masahisa, 1991. "Urban Economic Theory," Cambridge Books, Cambridge University Press, number 9780521396455.
    2. L. Benguigui & D. Czamanski & M. Marinov, 2004. "Scaling And Urban Growth," International Journal of Modern Physics C (IJMPC), World Scientific Publishing Co. Pte. Ltd., vol. 15(07), pages 989-996.
    3. Lucien Benguigui & Daniel Czamanski & Maria Marinov, 2001. "City Growth as a Leap-frogging Process: An Application to the Tel-Aviv Metropolis," Urban Studies, Urban Studies Journal Limited, vol. 38(10), pages 1819-1839, September.
    4. Daniel Czamanski & Dani Broitman, 2012. "Developers’ choices under varying characteristic time and competition among municipalities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 49(3), pages 733-743, December.
    5. Daniel Czamanski & Rafael Roth, 2011. "Characteristic time, developers’ behavior and leapfrogging dynamics of high-rise buildings," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 46(1), pages 101-118, February.
    6. Lucien Benguigui & Daniel Czamanski & Rafael Roth, 2008. "Modeling Cities in 3D: A Cellular Automaton Approach," Environment and Planning B, , vol. 35(3), pages 413-430, June.
    7. Thisse, Jacques-François & Fujita, Masahisa, 2008. "New Economic Geography: an appraisal on the occasion of Paul Krugman's 2008 Nobel Prize in Economics," CEPR Discussion Papers 7063, C.E.P.R. Discussion Papers.
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    9. Osland, Liv & Thorsen, Inge, 2005. "Effects on housing prices of urban attraction and labor market accessibility," Working Papers in Economics 17/05, University of Bergen, Department of Economics.
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    Cited by:

    1. Nataliya Rybnikova & Dani Broitman & Daniel Czamanski, 2023. "Initial signs of post-covid-19 physical structures of cities in Israel," Letters in Spatial and Resource Sciences, Springer, vol. 16(1), pages 1-11, December.
    2. Marina Toger & Dan Malkinson & Itzhak Benenson & Daniel Czamanski, 2016. "The connectivity of Haifa urban open space network," Environment and Planning B, , vol. 43(5), pages 848-870, September.
    3. Czamanski, Daniel & Broitman, Dani, 2017. "Information and communication technology and the spatial evolution of mature cities," Socio-Economic Planning Sciences, Elsevier, vol. 58(C), pages 30-38.
    4. Dani Broitman, 2020. "The Game of Developers and Planners: Ecosystem Services as a (Hidden) Regulation through Planning Delay Times," Sustainability, MDPI, vol. 12(15), pages 1-14, July.
    5. Erez Buda & Dani Broitman & Daniel Czamanski, 2021. "Urban Structure in Troubled Times: The Evolution of Principal and Secondary Core/Periphery Gaps through the Prism of Residential Land Values," Sustainability, MDPI, vol. 13(10), pages 1-12, May.
    6. Sadooghi, Seyed Ehsan & Taleai, Mohammad & Abolhasani, Somaie, 2022. "Simulation of urban growth scenarios using integration of multi-criteria analysis and game theory," Land Use Policy, Elsevier, vol. 120(C).
    7. Manon Glockmann & Yunfei Li & Tobia Lakes & Jürgen P Kropp & Diego Rybski, 2022. "Quantitative evidence for leapfrogging in urban growth," Environment and Planning B, , vol. 49(1), pages 352-367, January.
    8. Sudra Paweł, 2020. "Spatial dispersion and the concentration of buildings in an urban agglomeration – a typology proposal for the Warsaw Metropolitan Area," Environmental & Socio-economic Studies, Sciendo, vol. 8(4), pages 81-96, December.

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