IDEAS home Printed from https://ideas.repec.org/p/sce/scecf1/154.html
   My bibliography  Save this paper

Emergent Cities: A Microeconomic Explanation for Zipf's Law

Author

Listed:
  • Robert Axtell and Richard Florida

Abstract

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.

Suggested Citation

  • Robert Axtell and Richard Florida, 2001. "Emergent Cities: A Microeconomic Explanation for Zipf's Law," Computing in Economics and Finance 2001 154, Society for Computational Economics.
  • Handle: RePEc:sce:scecf1:154
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below 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.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cuberes David, 2009. "A Model of Sequential City Growth," The B.E. Journal of Macroeconomics, De Gruyter, vol. 9(1), pages 1-41, May.
    2. Soo, Kwok Tong, 2005. "Zipf's Law for cities: a cross-country investigation," Regional Science and Urban Economics, Elsevier, vol. 35(3), pages 239-263, May.
    3. Mark Lorenzen & Kristina Vaarst Andersen, 2007. "The Geography of the European Creative Class A Rank-Size Analysis," DRUID Working Papers 07-17, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    4. Claes Andersson & Koen Frenken & Alexander Hellervik, 2006. "A complex network approach to urban growth," Environment and Planning A, Pion Ltd, London, vol. 38(10), pages 1941-1964, October.
    5. Gabaix, Xavier & Ioannides, Yannis M., 2004. "The evolution of city size distributions," Handbook of Regional and Urban Economics,in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 53, pages 2341-2378 Elsevier.
    6. Gaujal, Bruno & Gulyas, Laszlo & Mansury, Yuri & Thierry, Eric, 2014. "Validating an agent-based model of the Zipf׳s Law: A discrete Markov-chain approach," Journal of Economic Dynamics and Control, Elsevier, vol. 41(C), pages 38-49.

    More about this item

    Keywords

    city formation; Zipf's law; agent-based model;

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • D0 - Microeconomics - - General
    • L0 - Industrial Organization - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. 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). General contact details of provider: http://edirc.repec.org/data/sceeeea.html .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.