Using a Local Public Good to Attract Representative Creative Class Members: The Inefficient Equilibrium Case - Theoretical Economics Letters

TEL > Vol.10 No.1, February 2020

Using a Local Public Good to Attract Representative Creative Class Members: The Inefficient Equilibrium Case ()

HTML XML

Download as PDF (Size: 272KB) PP. 40-46

DOI: 10.4236/tel.2020.101003 443 Downloads 840 Views Citations

Author(s)

Amitrajeet A. Batabyal¹, Seung Jick Yoo^2*

Affiliation(s)

¹Department of Economics, Rochester Institute of Technology, Rochester, New York, USA.
²Graduate School of International Service, Sookmyung Women’s University, Yongsan-gu, Seoul, Republic of Korea.

ABSTRACT

Batabyal and Beladi [1] have recently analyzed a model of competition between two cities that use a local public good (LPG) to attract members of the creative class. The creative class consists of artists and engineers and they study the behavior of a representative artist and an engineer. In this note, we explore three implications of the use of this “representative artist and engineer” modeling strategy. First, we show that the use of such a strategy can lead one to study an inefficient equilibrium in the aggregate economy. Second, we point out that in this inefficient equilibrium, the beliefs of the representative artist and the engineer are inconsistent. Finally, we contend that if we depart from the “representative artist and engineer” construct and focus instead on the entire creative class population which we model as a continuum, then the inefficient equilibrium mentioned above can be turned into an efficient equilibrium.

KEYWORDS

Artist, Creative Class, Efficient Equilibrium, Engineer, Inefficient Equilibrium

Share and Cite:

Batabyal, A. and Yoo, S. (2020) Using a Local Public Good to Attract Representative Creative Class Members: The Inefficient Equilibrium Case. Theoretical Economics Letters, 10, 40-46. doi: 10.4236/tel.2020.101003.

Journals Menu

Follow SCIRP

	+1 323-425-8868
	customer@scirp.org
	+86 18163351462(WhatsApp)
	1655362766

	Paper Publishing WeChat

Journals Menu

Home

About SCIRP

Service

Policies