Abstract
This chapter examines the structure of the urban economy and urban growth under spatial monopoly, spatial duopoly, and spatial competition. We find: First, for any external utility level, the wage rate is the largest under spatial duopoly, followed by spatial monopoly and dispersed spatial competition. Second, the rent profiles depend on the maximum commuting distance under each competition scenario. For example, if the maximum commuting distance under spatial monopoly is more than twice of that under dispersed spatial competition, the order of the three scenario’s rent profiles is the same as that of the wage rate. Third, there exists a sustained point of dispersed spatial competition and a break point of concentration in the city. The conditions for both points depend on the external utility level and labor productivity in the urban space. Spatial duopoly, rather than spatial monopoly, in a centralized city leads to agglomeration.
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Notes
- 1.
See Hotelling (1929). For overviews of spatial economics, see, for example, Alonso (1964), von Thunen (1966), Christaller (1966), Muth (1969), Kanemoto (1980), Henderson (1985), Mills (1987), and Fujita (1989) on urban land use; Fujita et al. (1999) and Fujita and Thisse (2002) on new economic geography; DiPasquale and Wheaton (1996) on real estate markets; and Beckmann and Thisse (1987), Greenhut et al. (1987), and Ohta (1988) on spatial competition.
- 2.
This section and Sect. 10.3.1 are mainly based on OAK (1990).
- 3.
Our linear market is not only open in the sense that households are free to migrate to and from outside the market but also closed in the sense that the population size is exogenous after considering the migration to and from that market. Definitions of open and closed as well as small cities were introduced by Wheaton (1974).
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Acknowledgements
The authors are grateful to Professors Mitsuyoshi Yanagihara, Kei Hosoya, and Tsuyoshi Shinozaki for comments on and critiques of earlier versions of this chapter.
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Wako, T., Takahashi, S. (2023). Concentration and Agglomeration in Spatial Monopoly, Spatial Duopoly, and Spatial Competition. In: Takahashi, S., Yanagihara, M., Hosoya, K., Shinozaki, T. (eds) Modern Macroeconomics with Historical Perspectives. New Frontiers in Regional Science: Asian Perspectives, vol 67. Springer, Singapore. https://doi.org/10.1007/978-981-99-1067-0_10
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