The purpose of this paper is to show that taste heterogeneity and imperfect information on the characteristics of available varieties among consumers can lead to the agglomeration of commercial activities. Here, the source of agglomeration is matching. By constructing a two-region model, we show...

This study explores the impacts of transport infrastructure investments on the compactness of a city. We introduce two new factors into the conventional Alonso-Mills-Muth model: First, city residents consume differentiated service varieties; and second, they pay transport costs not only to go to...

This paper studies the interdependence of economic geography and transportation technology. A two-region model is used to obtain the conditions for the modern transportation technology to be adopted in an economy. In particular, the impact of economic geography upon the adoption of the modern...