A STOCHASTIC MODEL OF COMPETITION BETWEEN TWO CITIES FOR MEMBERS OF THE CREATIVE CLASS

Amitrajeet Batabyal and Seung Jick Yoo ()
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Seung Jick Yoo: Graduate School of International Service, Sookmyung Women's University, Seoul, Republic of Korea

Regional Science Inquiry, 2019, vol. XI, issue 3, 37-42

Abstract: Batabyal and Yoo (2019) have recently obtained a significant result in their analysis of the use of utilitarian and Rawlsian policies by two cities to attract the creative class. They show that if one city switches to a Rawlsian or more egalitarian objective when the other city remains utilitarian, the aggregate economy of two cities becomes less egalitarian. We show that this result depends fundamentally on the assumption that the creative class population can be described by a triangular probability distribution. If this population is modeled instead with an inverted triangular probability distribution then the above result is reversed in the sense that the welfare of the worst-off member of the creative class is always enhanced when one city switches to a Rawlsian or more egalitarian objective, irrespective of the objective of the other city.

Keywords: City; Competition; Creative Class; Rawlsian; Utilitarian (search for similar items in EconPapers)
JEL-codes: D63 R11 (search for similar items in EconPapers)
Date: 2019
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http://www.rsijournal.eu/ARTICLES/December_2019/3.pdf (application/pdf)

Related works:
Working Paper: A Stochastic Model of Competition between Two Cities for Members of the Creative Class (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:hrs:journl:v:xi:y:2019:i:3:p:37-42

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