Micro-Foundations of Urban Agglomeration Economies

This handbook chapter studies the theoretical micro-foundations of urban agglomeration economies. We distinguish three types of micro-foundations, based on sharing, matching, and learning mechanisms. For each of these three categories, we develop one or more core models in detail and discuss the literature in relation to those models. This allows us to give a precise characterisation of some of the main theoretical underpinnings of urban agglomeration economies, to discuss modelling issues that arise when working with these tools, and to compare different sources of agglomeration economies in terms of the aggregate urban outcomes they produce as well as in terms of their normative implications.

Logistics of Mathematical Modeling-Focused Projects

This article addresses the logistics of implementing projects in an undergraduate mathematics class and is intended both for new instructors and for instructors who have had negative experiences implementing projects in the past. Project implementation is given for both lower and upper division mathematics courses with an emphasis on mathematical modeling and data collection. Projects provide tangible connections to course content which can motivate students to learn at a deeper level. Logistical pitfalls and insights are highlighted as well as descriptions of several key implementation resources. Effective assessment tools, which allowed me to smoothly adjust to student feedback, are demonstrated for a sample class. As I smoothed the transition into each project and guided students through the use of the technology, their negative feedback on projects decreased and more students noted how the projects had enhanced their understanding of the course topics. Best practices learned over the years are given along with project summaries and sample topics. These projects were implemented at a small liberal arts university, but advice is given to extend them to larger classes for broader use.Comment: 27 pages, no figures, 1 tabl

TOO MUCH INVESTMENT : A PROBLEM OF COORDINATION FAILURE

This paper shows that coordination failure and contractual incompleteness can lead to socially excessive investment. Firms and workers choose investment levels, then enter a stochastic matching process. If investment levels are discrete, and match frictions are low, high-investing workers (firms) impose a negative pecuniary externality on any worker (firm) who cuts investment. Specifically, an agent cutting investment subsequently bargains with a partner with a binding outside option due to the fact that it can easily match with another high investor. The deviant thus bears the full loss in revenue from its action. However, given enough complementarity in investments, when one agent cuts investment it is efficient that its partner also does so. So, only part of the cost saving accrues to the deviant, with the implication that the net private gain to cutting investment is less than the social gain. A similar argument establishes that over-investment can occur when agents are heterogenous i.e. differ in their cost of investing, even if investments are continuous. Then, over-investment occurs because low-cost investors have a private incentive to invest to shift rent away from high-cost investors. Our model can also explain some recent trends in graduate/non-graduate wage differentials.hold-up ; coordination failure ; matching ; over-investment