Information Technology and the Future of Cities
Will improvements in information technology eliminate face-to- face interactions and make cities obsolete? In this paper, we present a model where individuals make contacts and choose whether to use electronic or face-to-face meetings in their interactions. Cities are modeled as a means of reducing the fixed travel costs involved in face-to-face interactions. When telecommunications technology improves, there are two opposing effects on cities and face-to-face interactions: some relationships that used to be face-to-face will be done electronically (an intuitive substitution effect), and some individuals will choose to make more contacts, many of which result in face-to-face interactions. Our empirical work suggests that telecommunications may be a complement, or at least not a strong substitute for cities and face-to-face interactions. We also present simple models of learning in person, from a written source, or over the phone, and find that interactive communication dominates other forms of learning when ideas are complicated.
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|Date of creation:||1996|
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Web page: http://www.economics.harvard.edu/journals/hier
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- Ota, Mitsuru & Fujita, Masahisa, 1993. "Communication technologies and spatial organization of multi-unit firms in metropolitan areas," Regional Science and Urban Economics, Elsevier, vol. 23(6), pages 695-729, December.
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- Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
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- Jovanovic, Boyan, 1979. "Job Matching and the Theory of Turnover," Journal of Political Economy, University of Chicago Press, vol. 87(5), pages 972-990, October.
- Thomas Sargent, "undated". "Matlab code for Jovanovic's matching model," QM&RBC Codes 24, Quantitative Macroeconomics & Real Business Cycles.
- Rosen, Sherwin, 1981. "The Economics of Superstars," American Economic Review, American Economic Association, vol. 71(5), pages 845-858, December. Full references (including those not matched with items on IDEAS)
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