IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Emergent Cities: A Microeconomic Explanation for Zipf's Law

  • Robert Axtell and Richard Florida

A model of city formation and evolution is elaborated, based on a multi-agent model of endogenous firm formation. Agents have heterogeneous abilities, are boundedly rational, and interact directly with one another out of equilibrium in team production environments. Each agent works in a firm and each firm has a location. Agents periodically search for positions in other firms that would give them higher utility. Moves between firms are migrations when they involve changes in location. Agents can also start-up new firms if it is welfare-improving to do so. With high probability the location of a new firm is identical with the current location of its founder. However, there is a small chance that a new firm starts up in a different location, with the new location chosen at random. This makes it possible for new cities to occasionally emerge. Over time the movement of individuals across firms combines with the movement of firms across locations to yield clusters of agents and firms in particular locations, i.e., cities. It is demonstrated that under a wide range of conditions these locational clusters reproduce the so-called ÎZipf lawÌ for city sizes, i.e., a Pareto-distribution with exponent 1. This model also yields empirically-significant wage-city size effects, city growth rate distributions, and dependence of city growth rate variance on size. Apparently, this model constitutes the first microeconomic explanation of these phenomena.

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Paper provided by Society for Computational Economics in its series Computing in Economics and Finance 2001 with number 154.

as
in new window

Length:
Date of creation: 01 Apr 2001
Date of revision:
Handle: RePEc:sce:scecf1:154
Contact details of provider: Web page: http://www.econometricsociety.org/conference/SCE2001/SCE2001.html
Email:


More information through EDIRC

No references listed on IDEAS
You can help add them by filling out this form.

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:sce:scecf1:154. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christopher F. Baum)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.