In this paper we study a class of evolutionary models of industrial agglomeration with local positive feedbacks, which allow for a wide set of empirically-testable implications. Their roots rest in the Generalized Polya Urn framework. Here, however, we build on a birth-death process over a...

This paper proposes a model of urban agglomeration in conjunction with imperfect competition and endogenous product R&D of firms. The quality of differentiated manufacturing goods is a result of R&D services provided by research firms. Sectoral interactions are subject to spatially dependent...

The systems of innovation (SI) approach has been established and extended during the last two decades. Although elementary goals and progress have been reached through seminal contributions by Freeman (1987), Lundvall (1992) or Nelson (1993), in designing a generic approach, displaying the...

This paper introduces price-dependent individual demand into the circular city model of product differentiation. We show that for any finite number of firms, a unique symmetric price equilibrium exists provided that demand functions are not "too" convex. As in the case of unit demand, the number...

How much does a nation spend on resources to 'grease the wheels of trade'? To examine this question the Dutch economy is used as an exemplary case as the Netherlands are known as a nation of traders. This image was derived in the seventeenth century from successes in long distance trade,...

Being a "jack-of-all-trades" increases the probability of running an entrepreneurial venture successfully; but what happens to "jack-of-few-trades" who lack sufficient skills? This paper investigates a possible compensation mechanism between balanced skills and cities, and how this compensatory...

We consider an economy in which a heterogeneous population of agents have to choose among a common set of alternatives. The utilities associated to the different alternatives posses a common component and an individual component, which reflect differences in the underlying structure of agents...

The present paper considers the issue of High Frequency Trading (HFT) regulation. Rather than discussing macro-level effects of HFT that are still under debate (Sornette & Von der Becke, 2011) its analysis focuses on the issue of regulation from the perspective of HFT firms. Assuming that HFT...

There is much evidence against the so-called too big to fail hypothesis in the case of bailouts to sub-national governments. We look at a model where districts of different size provide local public goods with positive spillovers. Matching grants of a central government can induce...