Locational signaling and agglomeration
Marcus Berliant () and
MPRA Paper from University Library of Munich, Germany
Agglomeration can be caused by asymmetric information and a locational signaling effect: The location choice of workers signals their productivity to potential employers. The cost of a signal is the cost of housing at a location. When workers’ price elasticity of demand for housing is negatively correlated with their productivity, skill-biased technological change causes a core-periphery bifurcation where the agglomeration of high-skill workers eventually constitutes a unique stable equilibrium. When workers’ price elasticity of demand for housing and their productivity are positively correlated, skill-biased technological improvements will never result in a core periphery equilibrium. This paper claims that location can at best be an approximate rather than a precise sieve for high-skill workers.
Keywords: Agglomeration; Adverse Selection; Asymmetric Information; Locational Signaling (search for similar items in EconPapers)
JEL-codes: R13 D82 D51 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cta, nep-geo and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations Track citations by RSS feed
Downloads: (external link)
https://mpra.ub.uni-muenchen.de/19462/1/MPRA_paper_19462.pdf original version (application/pdf)
Journal Article: LOCATIONAL SIGNALING AND AGGLOMERATION (2015)
Working Paper: Locational signaling and agglomeration (2014)
Working Paper: Locational signaling and agglomeration (2012)
Working Paper: Locational signaling and agglomeration (2010)
Working Paper: Locational signaling and agglomeration (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:19462
Access Statistics for this paper
More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Series data maintained by Joachim Winter ().