"The agglomeration force behind the New Economic Geography literature initiated by Krugman is based on the notion that larger markets should have a lower variety adjusted price index. Despite his Nobel Prize, there have been no tests of this idea. This paper represents the first such test. Using...

Cities and marketplaces are central to economic development, but we know little about why such agglomerations initially form. I argue that evolutionary forces select for agglomerations when individuals' desire to spatially coordinate exchange in complex environments. To test this idea, I perform...