Locational choice in a duocentric urban system (with an application to the Portuguese economy)

• Autor(a) principal: Pontes, José Pedro
• Data de Publicação: 1995
• Outros Autores: Santos, Vítor
• Tipo de documento: Artigo
• Idioma: eng
• Título da fonte: Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)
• Texto Completo: http://hdl.handle.net/10400.5/25815
• topic: Duocentric Urban System; Transport Costs; Firms Location; Clusters; Lisboa; Porto; Sistema urbano duocentrico; Custos de transporte; Localização de empresas; Clusters; Lisboa; Porto

In a duocentric urban system, where the towns are port-cities and one is a capital, two firms face a trade-off between minimizing transport costs to a port and minimizing inter-firm distance in order to benefit from spatial externalities. The concept of Nash equilibrium is unsatisfactory here because equilibria are multiple and none is symmetric: to cluster in each port-city is a Nash equilibrium for both firms. If we adopt the concept of local Nash equilibrium, new symmetric equilibria arise for each set of values of parameters. If transport costs dominate, each firm locates in a port; if economies of agglomeration dominate, the firms cluster in a point arbitrarily near to the centre of the market, closer to the city which is not a capital. If transport costs decrease, a duocentric urban system tends to a tricentric system with a third centre where firms agglomerate. The decrease of transport costs between the Portuguese cities of Lisbon and Oporto creates the possibility of locating a set of common infrastructures in an intermediate point.