Computational modeling of city formation

Although a burst of recent research in economics has examined how industries form, a majority of it considers highly simplified models. In this paper, we use computational modeling techniques to expand from traditional, simple, analytically tractable economic models to more complex two dimensional landscapes. Using the basic theories developed in earlier research, we examine what factors cause cities to emerge, including: transportation costs, the percentage of workers in a population, and the elasticity of substitution. These three factors should cause workers and firms to agglomerate, causing cities to emerge out of a scattered population. Copyright Springer Science+Business Media, LLC 2007