An agent model of urban economics: Digging into emergence

This paper presents an agent-based ‘monocentric’ model: assuming only a fixed location for firms, outcomes closely parallel those found in classical urban economic models, but emerge through ‘bottom-up’ interaction in an agent-based model. Agents make buying and movement decisions based on a set of simple costs they face from their current location. These spatial costs are reduced to two types: the costs of moving people and goods across geographical distances and the costs (and benefits) of ‘being here’ (the effects of being at a particular location such as land costs, amenities or disamenities). Two approaches to land cost are compared: landlords and a ‘density cost’ proxy. Emergent equilibrium outcomes are found to depend on the interaction of externalities and time. These findings are produced by looking at how agents react to changing four types of cost, two spatial and two non-spatial: commuting, wage, good cost and good delivery. The models explore equilibrium outcomes, the effect of changing costs and the impact of heterogeneous agents, before focusing in on one example to find the source of emergence in the externalities of agent choice. The paper finishes by emphasising the importance of thinking about emergence as a tool, not an end in itself.