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Land use and rent gradients with a monopoly vendor and two central business districts

Author

Listed:
  • Fu-Chuan Lai

  • David Merriman

  • Jyh-Fa Tsai

Abstract

Dispersed consumer amenities such as shopping and cultural attractions greatly influence land use patterns and rent gradients. Lai and Tsai (J Urban Econ 63:536–543, 2008 ) generalize the traditional Alonso–Mills–Muth model by introducing a monopoly vendor and show that the vendor will choose a boundary location. We generalize their model by allowing for inter-city shopping, which is very common in the real world. The location choice of a monopoly vendor and the consequent changes of urban configuration in two adjacent cities are discussed. This paper shows that as the distance between two CBDs decreases, the vendor may choose to locate at an inner city boundary, at the mid-point between the two cities, and at one of the outer boundaries, respectively. In many cases, a core-periphery urban structure will result. Copyright Springer-Verlag Berlin Heidelberg 2014

Suggested Citation

  • Fu-Chuan Lai & David Merriman & Jyh-Fa Tsai, 2014. "Land use and rent gradients with a monopoly vendor and two central business districts," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(3), pages 745-760, November.
    • Handle: RePEc:spr:anresc:v:53:y:2014:i:3:p:745-760
    DOI: 10.1007/s00168-014-0643-z
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    References listed on IDEAS

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    1. Rikard Forslid & Gianmarco I.P. Ottaviano, 2003. "An analytically solvable core-periphery model," Journal of Economic Geography, Oxford University Press, vol. 3(3), pages 229-240, July.
    2. Fujita,Masahisa & Thisse,Jacques-François, 2013. "Economics of Agglomeration," Cambridge Books, Cambridge University Press, number 9781107001411, January.
    3. Henderson, Vernon & Mitra, Arindam, 1996. "The new urban landscape: Developers and edge cities," Regional Science and Urban Economics, Elsevier, vol. 26(6), pages 613-643, December.
    4. Lai, Fu-Chuan & Tsai, Jyh-Fa, 2008. "Simplified Alonso-Mills-Muth model with a monopoly vendor," Journal of Urban Economics, Elsevier, vol. 63(2), pages 536-543, March.
    5. Fujita, Masahisa & Thisse, Jacques-Francois & Zenou, Yves, 1997. "On the Endogeneous Formation of Secondary Employment Centers in a City," Journal of Urban Economics, Elsevier, vol. 41(3), pages 337-357, May.
    6. Yang Zhang & Komei Sasaki, 2005. "Edge city formation and the resulting vacated business district," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 39(3), pages 523-540, September.
    7. Jyh-Fa Tsai & Fu-Chuan Lai, 2012. "Urban Configurations with Suburban Employment by a Monopoly Vendor," International Regional Science Review, , vol. 35(4), pages 424-441, October.
    8. Takahashi, Takaaki, 2014. "Location competition in an Alonso–Mills–Muth city," Regional Science and Urban Economics, Elsevier, vol. 48(C), pages 82-93.
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    More about this item

    Keywords

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    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies

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