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From Neighborhoods to NationsThe Economics of Social Interactions$
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Yannis M. Ioannides

Print publication date: 2012

Print ISBN-13: 9780691126852

Published to Princeton Scholarship Online: October 2017

DOI: 10.23943/princeton/9780691126852.001.0001

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Social Interactions and Urban Spatial Equilibrium

Social Interactions and Urban Spatial Equilibrium

(p.200) Chapter 5 Social Interactions and Urban Spatial Equilibrium
From Neighborhoods to Nations

Yannis M. Ioannides

Princeton University Press

This chapter explores what the interactions of individuals and firms in their vicinity and in broader communities reveal about the spatial structure of cities as self-organization by agents. It first introduces a benchmark, the Alonso–Mills–Muth model of a city in its bare essentials, and examines its implications for urban density and the associated pattern of land prices in the case with a predetermined center, the central business district (CBD). It then considers the geometry of spatial equilibrium when there is no predetermined center and social interactions are dispersed, along with the location decisions of firms in urban space, monocentric versus polycentric models of the urban economy, and the Lucas–Rossi-Hansberg models of urban spatial structure with productive externalities. It also analyzes neighborhood effects, urban equilibrium when proximity is a conduit for the transmission of job-related information, and the link between choice of job matching and spatial structure.

Keywords:   spatial structure, city, Alonso–Mills–Muth model, spatial equilibrium, social interactions, location decisions, Lucas–Rossi-Hansberg model, urban spatial structure, neighborhood effects, job matching

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