informational role of cities is a primary reason for" their continued existence. This paper formalizes Marshall's theory in a model … of other implications of the theory are corroborated" empirically …

Entrepreneurs who start new firms may choose not-for-profit status as a means of committing to soft incentives. Such … incentives protect donors, volunteers, consumers and employees from ex post expropriation of profits by the entrepreneur. We … high quality products, the incentives are even softer, and, moreover, non-profit status can serve as a signal of that taste …