This academic paper presents a simulation of urban neighbourhood formation and growth based on the economic theory of property rights.
The simulation shows that stable and efficient neighborhoods can evolve from a random distribution of "good" neighbors who offer voluntary reductions in the activities that reduce the welfare of neighbors. However, such neighbourhoods may not evolve and the city may fragment into inefficient neighborhoods in which the normal prisoner's dilemma dynamic holds; or into unstable neighborhoods. Which type of city emerges is purely a matter of chance and depends on the initial spatial distribution of good neighbors.
Thanks to Planning & Markets Editor
FULL STORY: Contractual Agreements And Neighbourhood Evolution
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