Abstract
In this article, we construct a general equilibrium model that uses households and firms distributed over a one-dimensional space including households that commute to each firm. In addition, we examine whether the configuration of the city becomes symmetric or asymmetric depending on the values for the transportation and communication parameters. An agglomeration occurs as interplay between the interaction field among agents and competition in the land market. Access costs encourage each firm to establish itself near other firms, thus fostering an agglomeration. As expected, one kind of firm concentrates in the city center, and the remainder of firms locate around the city center.
Consequently, the configuration appears to depend on an increase or decrease in the values of the parameters. Even more interesting is that the direction of the parameter change affects the configurations of the city. This phenomenon is known as hysteresis in physics and can result in various urban configurations depending on historical conditions. This indicates that different configurations of a city occur with different initial endowments.
The equilibrium patterns in the parameter space and the conditions of the transition between all patterns need to be analyzed. The optimal configuration of a city can also be clarified by examining lower transport costs and environmental impacts with this model.
JEL Classification: R14, R30, L20
