Batabyal, A.A. and Beladi, H. (2019) On the Existence of an Equilibrium in Models of Local Public Good Use by Cities to Attract the Creative Class. Unpublished Manuscript, Rochester Institute of Technology, Rochester, NY.

has been cited by the following article:

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

  AUTHORS: Amitrajeet A. Batabyal, Seung Jick Yoo

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

  JOURNAL NAME: Theoretical Economics Letters, Vol.10 No.1, January 17, 2020

  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.