【摘要】In many developing countries such as China; the typical marketplace is a cluster of small shops or booths. We investigate an economic model in which circular causality; including search and matching between buyers and sellers; forms agglomeration forces. We find that an authoritative third party that reduces search costs is important in sustaining a large marketplace. However; it is unnecessary to reduce search costs to zero. Finally; the low capital requirement of setting up a firm helps to sustain a large marketplace owing to its increased product heterogeneity.

【文献来源】Ke Ding; Toshitaka Gokan; Xiwei Zhu.Annals of regional Science.2017（1）