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Labor Specialization and City Formation

Author

Listed:
  • BERLIANT, Marcus

    (Department of Economics, Washington University)

  • ZENOU, Yves

    (CORE, Université catholique de Louvain and ERMES, Université Panthéon-Arras)

Abstract

The aim of the paper is to explore the formation of cities through labor specialization, gains to trade, a fixed cost for the transportation network, imperfect competition between firms and the commuting costs of consumers. The model uses a very general setting, allowing a multidimensional location space and multiple firms using different types of labor to produce different outputs. Locations of all agents are endogenous as are prices and quantities. Firms playa Nash location game among themselves, anticipating the locations of consumers, but taking prices as given. Within this framework, we characterize the spatial configuration of firms in equilibrium. Whether or not equilibrium exists and whether or not it is locally unique depend crucially on the relative numbers of outputs, types of labor and firms. Finally, both welfare theorems fail in this model.

Suggested Citation

  • BERLIANT, Marcus & ZENOU, Yves, 1995. "Labor Specialization and City Formation," LIDAM Discussion Papers CORE 1995008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:1995008
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp1995.html
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    Cited by:

    1. Ronald Cossman & Jeralynn Cossman & Arthur Cosby & Rebel Reavis, 2008. "Reconsidering the Rural–Urban Continuum in Rural Health Research: A Test of Stable Relationships Using Mortality as a Health Measure," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 27(4), pages 459-476, August.
    2. Yves Zenou, 1996. "Marché du travail et économie urbaine. Essai d'intégration," Revue Économique, Programme National Persée, vol. 47(2), pages 263-288.
    3. Michel Houdebine, 1999. "Concentration géographique des activités et spécialisation des départements français," Économie et Statistique, Programme National Persée, vol. 326(1), pages 189-204.

    More about this item

    JEL classification:

    • D50 - Microeconomics - - General Equilibrium and Disequilibrium - - - General
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • R14 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Land Use Patterns

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