When Worlds Collide: Different Comparative Static Predictions of Continuous and Discrete Agent Models with Land
View/ Open
Issue Date
2008Author
Berliant, Marcus
Sabarwal, Tarun
Publisher
Elsevier
Type
Article
Article Version
Scholarly/refereed, author accepted manuscript
Metadata
Show full item recordAbstract
This paper presents a difference in the comparative statics of general equilibrium models with land
when there are finitely many agents, and when there is a continuum of agents. Restricting attention to quasi-linear and Cobb-Douglas utility, it is shown that with finitely many agents, an increase in the (marginal) commuting cost increases land rent per unit (that is, land rent averaged over the consumer’s equilibrium parcel) paid by the consumer located at each fixed distance from the central business district. In contrast, with a continuum of agents, average land rent goes up for consumers at each fixed distance close to the central business district, is constant at some intermediate distance, and decreases
for locations farther away. Therefore, there is a qualitative difference between the two types of models, and this difference is potentially testable.
Description
This is the Author's Final Draft. The original published version is available at: http://dx.doi.org/10.1016/j.regsciurbeco.2008.05.004
Collections
Citation
Berliant, Marcus and Tarun Sabarwal (2008): “When Worlds Collide: Different Comparative Static Predictions of Continuous and
Discrete Agent Models with Land,” Regional Science and Urban Economics, 38(5), 438-444. http://dx.doi.org/10.1016/j.regsciurbeco.2008.05.004
Items in KU ScholarWorks are protected by copyright, with all rights reserved, unless otherwise indicated.
We want to hear from you! Please share your stories about how Open Access to this item benefits YOU.