The core-periphery model with three regions

We study a 3-region core-periphery model à la Krugman and compare our results with those of the standard 2-region model. The conditions for the stability of the dispersion and concentration configurations are established. Like in the 2-region model, dispersion and concentration can be simultaneously stable. We show that the 2- region (3-region) model favors the dispersion (concentration) of economic activity. Finally, we extend the core-periphery model to the case of n regions and show that stability of concentration with 2 regions implies stability of concentration with any even number of regions.