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Economic geography --- Regional planning --- Mathematical models --- Mathematical models. --- AA / International- internationaal --- 37 --- 338.32 --- 382.10 --- 337.554 --- 911.3:33 --- -Regional planning --- -330.9 --- Regional development --- State planning --- Human settlements --- Land use --- Planning --- City planning --- Landscape protection --- Geography, Economic --- World economics --- Geography --- Commercial geography --- Geografische economie. Monografieën van streken en landen. --- Vestigingsplaats en specialisatie van de productie. Ondernemingscentra. --- Theorieën van internationale en interregionale handel: algemeenheden. Comparatieve voordelen. --- Vrijhandelsgebieden en -associaties. Europese Vrijhandelsassociatie. Europese Economische Ruimte. --- Economische geografie --- Government policy --- 330.9 --- Geographic models --- Vrijhandelsgebieden en -associaties. Europese Vrijhandelsassociatie. Europese Economische Ruimte --- Vestigingsplaats en specialisatie van de productie. Ondernemingscentra --- Geografische economie. Monografieën van streken en landen --- Theorieën van internationale en interregionale handel: algemeenheden. Comparatieve voordelen --- Economic geography - Mathematical models --- Regional planning - Mathematical models --- Aménagement du territoire --- Régionalisation économique --- Géographie économique --- Disparités régionales --- Espace (économie politique) --- Modèles économétriques --- Aménagement du territoire --- Régionalisation économique --- Géographie économique --- Disparités régionales --- Espace (économie politique) --- Modèles économétriques

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How do people arrange themselves when they are free to choose work and residence locations, when commuting is costly, and when increasing returns may affect production? We consider this problem when the location set is discrete and households have heterogenous preferences over workplace-residence pairs. We provide a general characterization of equilibrium throughout the parameter space. The introduction of preference heterogeneity into an otherwise conventional urban model fundamentally changes equilibrium behavior. Multiple equilibria are pervasive although stable equilibria need not exist. Stronger increasing returns to scale need not concentrate economic activity and lower commuting costs need not disperse it. The qualitative behavior of the model as returns to scale increase accords with changes in the patterns of urbanization observed in the Western world between the pre-industrial period and the present.