2015 Volume 71 Issue 5 Pages I_129-I_141
Interactions between individual agents are fundamental to our society. Local interactions generate external effects such as knowledge spillovers and synergies. From the spatial aspect, face-to-face contacts are regarded as a crucial factor of the existence and the structures of cities. In this paper, we propose a social interaction model into which two kinds of strategic complementarity intrinsic to face-to-face contacts are incorporated, and examine those effects on urban spatial structure. Furthermore, we reveal that a decrease of transportation cost may lead to locational dispersion and decline the level of social interaction in a city.