Locational Signaling and Agglomeration

Abstract

Agglomeration can be caused by asymmetric information and a locational signaling effect: The location choice of workers signals their productivity to potential employers. The cost of a signal is the cost of housing at that location. When workers' marginal willingness to pay for housing is negatively correlated with their productivity, only the core-periphery (partially stratified) equilibria are stable. When workers' marginal willingness to pay for housing and their productivity are positively correlated, there is no core-periphery equilibrium. Location can at best be an approximate rather than a precise sieve for high-skill workers. (JEL Classifications: D51; D82; R13)

Agglomeration patterns in a long narrow economy of a new economic geography model: Analogy to a racetrack economy

“…Both N skilled 4 The evolution of spatial agglomeration was studied by Krugman (1991), leading to the subsequent development of NEG models various kinds (for a review, see Baldwin et al 2003). Real economic activities allow models of various kinds that entail diverse agglomerations (Pflüger and Südekum 2008;Berliant and Yu 2014). 5 For central place theory, see Christaller (1933) and Lösch (1940).…”

“…Agglomeration is known to be parameter dependent. For example, Berliant and Yu () demonstrated the dependence of agglomeration on the cost of living. The relative predominance of centripetal forces promoting agglomeration and centrifugal forces engendering dispersion is dependent on parameters in core–periphery models (Section 3).…”

“…). Real economic activities allow models of various kinds that entail diverse agglomerations (Pflüger and Südekum ;Berliant and Yu )…”

Stable Economic Agglomeration Patterns in Two Dimensions: Beyond the Scope of Central Place Theory

“…For instance,Berliant and Yu (2014) demonstrated the dependence of agglomeration on the cost of living.27 SeeFigure 17and the preprint (Ikeda, Murota, and Takayama 2014) of this paper for numerically obtained equilibrium curves for these parameter values. C 2016 Wiley Periodicals, Inc.…”

“…For instance, Berliant and Yu () demonstrated the dependence of agglomeration on the cost of living.…”