The DOI matches its Crossref record; 14 of the 14 references it cites were found in a registry or an index.
Knife-Edge or Plateau: When Do Market Models Tip?
Abstract
This paper studies whether agents must agglomerate at a single location in a class of models of two-sided interaction. In these models there is an increasing returns effect that favors agglomeration, but also a crowding or market-impact effect that makes agents prefer to be in a market with fewer agents of their own type. We show that such models do not tip in the way the term is commonly used. Instead, they have a broad plateau of equilibria with two active markets, and tipping occurs only when one market is below a critical size threshold. Our assumptions are fairly weak, and are satisfied in Krugman's model of labor market pooling, a heterogeneous-agent version of Pagano's asset market model, and Ellison, Fudenberg, and Möbius' model of competing auctions.
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“If the sellers cannot differentiate aside from adopting a standard, they must differentiate by choosing separate standards, which leads to the adoption of multiple standards (Ellison and Fudenberg, 2003) or even adoption failure (Augereau, Greenstein, and Rysman, 2006;Kretschmer, 2008).”
From The Economics of Two-Sided Markets (2009) · cites this paper as Ellison and Fudenberg, 2003
Citations
Cites
Increasing Returns and Economic Geography
Krugman, P. (1990) · Journal of Political Economy · doi:10.1086/261763 · Cited by 12,712
PE, & Billingsley, P. (1996) · Journal of the American Statistical Association · doi:10.2307/2291440 · Cited by 6,681
Geography and TradePreprint
Krugman, P. (1991) · RePEc: Research Papers in Economics · Cited by 6,123
Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach
Ellison, G., & Glaeser, E. L. (1994) · National Bureau of Economic Research · doi:10.3386/w4840 · Cited by 1,429
Self-citationSupply Function Equilibria in Oligopoly under Uncertainty
Klemperer, P. D., & Meyer, M. (1989) · Econometrica · doi:10.2307/1913707 · Cited by 1,362
Informed Speculation with Imperfect Competition
Kyle, A. S. (1989) · The Review of Economic Studies · doi:10.2307/2297551 · Cited by 1,023
The Sizes and Types of CitiesPreprint
Henderson, J. V. (1972) · RePEc: Research Papers in Economics · Cited by 955
Trading Volume and Asset Liquidity
Pagano, M. (1989) · The Quarterly Journal of Economics · doi:10.2307/2937847 · Cited by 660
Geographic Concentration as a Dynamic Process
Dumais, G., Ellison, G., & Glaeser, E. L. (2002) · The Review of Economics and Statistics · doi:10.1162/003465302317411479 · Cited by 654
Self-citationA monopolistic competition model of spatial agglomeration
Fujita, M. (1988) · Regional Science and Urban Economics · doi:10.1016/0166-0462(88)90007-5 · Cited by 368
Cited by
Sorted by citations
Micro-Foundations of Urban Agglomeration Economies
Duranton, G., & Puga, D. (2003) · National Bureau of Economic Research · doi:10.3386/w9931 · Cited by 1,709
Chapter 48 Micro-foundations of urban agglomeration economies
Duranton, G., & Puga, D. (2004) · Handbook of regional and urban economics · doi:10.1016/s1574-0080(04)80005-1 · Cited by 1,432
The Economics of Two-Sided Markets
Rysman, M. (2009) · Journal of Economic Perspectives · doi:10.1257/jep.23.3.125 · Cited by 1,261
Chapter 31 Coordination and Lock-In: Competition with Switching Costs and Network Effects
Farrell, J., & Klemperer, P. (2007) · Handbook of Industrial Organization · doi:10.1016/s1573-448x(06)03031-7 · Cited by 1,061
Eisenmann, T. R., Parker, G., & Van Alstyne, M. W. (2010) · SSRN Electronic Journal · doi:10.2139/ssrn.1496336 · Cited by 829
Metadata
- Authors
- Ellison, G., & Fudenberg, D.
- Affiliations
- Massachusetts Institute of Technology (US)
- Harvard University (US)
- Venue
- The Quarterly Journal of Economics
- Publisher
- Oxford University Press (OUP)
- Published
- 2003-11-01
- Volume
- 118
- Issue
- 4
- Pages
- 1249-1278
- ISSN
- 0033-5533 (ISSN-L)
- 1531-4650
- OpenAlex
- W2154859236
- Cited by
- 156
- References
- 14
- Citations by year
- 2026: 4 · 2025: 5 · 2024: 7 · 2023: 7 · 2022: 1 · 2021: 5 · 2020: 7 · 2019: 5 · 2018: 12 · 2017: 8 · 2016: 6 · 2015: 4 · 2014: 9 · 2013: 7 · 2012: 7
- FWCI
- 16.17
- Type
- journal article
- Language
- en
- Open access
- closed
- Locations
- The Quarterly Journal of Economics (publishedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- Funders
- National Science Foundation (0112018, 0219205)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Economic theories and models
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Complex Systems and Time Series Analysis
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Agglomeration and Urban Systems
- Keywords
- tipping, agglomeration, increasing returns, price impact, multiple equilibria, labor market pooling, heterogeneous agents, spatial economics
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