the aim of comparing the only two possible market outcomes, i.e. agglomeration and dispersion. More precisely, we use the … plausible values of the main parameters suggest that there might be excessive agglomeration. …

agglomeration economies. This paper provides a microeconomically founded model of vertical city differentiation in which the latter … two mechanisms (`agglomeration' and `selection') operate simultaneously. Our model is both rich and tractable enough to …

into large cities, because large cities select more productive entrepreneurs and firms, or because of agglomeration … between them. The model can replicate stylised facts about sorting, agglomeration, and selection in cities. It can also …

This chapter surveys recent developments in agglomeration theory within a unifying framework. We highlight how … locational fundamentals, agglomeration economies, the spatial sorting of heterogeneous agents, and selection effects affect the …