Imitation in Location Choice

摘要: Under the assumption of perfect competition, it is difficult to avoid conclusion that abandoned properties and long undeveloped neighborhoods remain way because they are unprofitable. In contrast, this paper introduces a model in which firms systematically overlook with little commercial activity positive informational externality motivating later movers condition choice location on earlier movers’ locations. When occurs, sometimes find profitable imitate early locations even though privately acquired information suggests locating elsewhere. The facilitates normative analysis imitation by explicitly quantifying losses aggregate efficiency following shift from centralized decentralized regimes. provides tool for investigating hypothesis inefficient lock-in as relates U.S. urban centers underutilized despite presence business prospects.