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讲座简介：
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Why do we observe urban sprawl although the aggregate transportation cost for accessing amenities should be lower in city centers than in suburbs? Why do we observe that the development of commercial properties often occur ahead of projected demand? Using a game-theoretic approach within a monocentric city framework, this article addresses the questions by analyzing developers’ optimal entry decisions in a duopoly market setting. When property rents and development costs vary across locations and evolve stochastically over time, the frequently observed frog-leap phenomenon can occur if a suburban developer has the locational advantage in rent and/or cost than an urban developer. The Goldilocks principle also applies to each developer’s preemption strategy when competition is sufficiently intense such that both developers have incentives to be the leader. That is, when the volatility of the operating environment in the real estate market is not too high or too low, a developer will enter the market at the date that prevents her/his rival from entry rather than maximizes her/his value as the leader such that overbuilding will arise.
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