arXiv subjects

Minoru Osawa

Publications and source records attributed to Minoru Osawa.

8 recordsLinked to original sources

arXiv2026

Sampling logit equilibrium and endogenous payoff distortion

We introduce sampling logit equilibrium (SLE) for population games in which agents infer payoffs from a finite sample of $k$ opponents' actions and respond according to a logit choice rule. We find that sampling error systematically distorts incentives. Actions whose inferred payoffs are relatively more variable earn a variance premium, while nonlinear payoffs generate a curvature premium through Jensen effects. For large samples, an SLE is approximated by a logit equilibrium of a virtual game whose payoffs include these premiums. For linear games, when sampling error and logit noise vanish at comparable rates, their interaction around completely mixed Nash equilibria is reduces to a Gaussian--Gumbel limiting model. We also establish exact finite-$k$ uniqueness and stability results. In particular, in two-action coordination games with a $1/k$-dominant action, the unique SLE converges to the risk-dominant equilibrium as logit noise vanishes.

econ.TH↗

arXiv2025

Innovation, Spillovers and Economic Geography

We develop a Schumpeterian quality-ladder spatial model in which innovation arrivals depend on regional knowledge spillovers. A parsimonious reduced-form diffusion mechanism induces the convergence of regions' average distance to the global frontier quality. As a result, regional differences in knowledge levels stem residually from asymmetries in the spatial distribution of researchers and firms. We analytically characterize the processes of innovation and knowledge diffusion. We then explore how the weight of intra-relative to inter-regional knowledge spillovers interacts with freer trade to shape the spatial distribution of economic activities. If intra-regional spillovers are relatively stronger, a higher economic integration leads to progressive agglomeration. If inter-regional spillovers dominate, researchers and firms may re-disperse after an initial phase of agglomeration as integration increases. This happens because firms and researchers have incentives to relocate to the smaller region, where they can leverage the concentrated knowledge base of the larger region while avoiding congestion in innovation. The smoothness of the dispersion process depends on the particular weight of intra-regional spillovers. If inter-regional spillovers become stronger as trade becomes freer, then the latter induces a monotone dispersion process. When integration is high enough, stable long-run equilibria always maximize the growth rate of the global frontier quality and the average distance to the frontier, irrespective of whether spillovers are mainly local or global.

econ.TH↗

arXiv2022

Innovation through intra and inter-regional interaction in economic geography

We develop a two-region economic geography model with vertical innovations that improve the quality of manufactured varieties produced in each region. The chance of innovation depends on the \emph{related variety}, i.e. the importance of interaction between researchers within the same region rather than across different regions. As economic integration increases from a low level, a higher related variety is associated with more agglomerated spatial configurations. However, if the interaction with foreign scientists is relatively more important for innovation, economic activities may (completely) re-disperse after an initial phase of agglomeration due to the increase in the relative importance of a higher chance of innovation in the less industrialized region. This non-monotonic relationship between economic integration and spatial imbalances may exhibit very diverse qualitative properties, not yet described in the literature.

econ.TH↗

arXiv2022

Origin of power laws and their spatial fractal structure for city-size distributions

City-size distributions follow an approximate power law in various countries despite high volatility in relative city sizes over time. Our empirical evidence for the United States and Japan indicates that the scaling law stems from a spatial fractal structure owing to the coordination of industrial locations. While the locations of individual industries change considerably over time, there is a persistent pattern in that more localized industries at a given time are found only in larger cities. The spatial organization of cities exhibits a hierarchical structure in which larger cities are spaced apart to serve as centers for surrounding smaller cities, generating a recursive pattern across different spatial scales. In our theoretical replication of the observed regularities, diversity in scale economy among industries induces diversity in their location pattern, which translates into diversity in city size via spatial coordination of industries and population. The city-size power law is a generic feature of Monte-Carlo samples of stationary states resulting from the spontaneous spatial fractal structure in the hypothetical economy. The identified regularities reveal constraints on feasible urban planning at each regional scale. The success or failure of place-based policies designed to take advantage of individual cities' characteristics should depend on their spatial relationships with other cities, subject to the nationwide spatial fractal structure.

econ.GN↗

arXiv2021

Production externalities and dispersion process in a multi-region economy

We consider an economic geography model with two inter-regional proximity structures: one governing goods trade and the other governing production externalities across regions. We investigate how the introduction of the latter affects the timing of endogenous agglomeration and the spatial distribution of workers across regions. As transportation costs decline, the economy undergoes a progressive dispersion process. Mono-centric agglomeration emerges when inter-regional trade and/or production externalities incur high transportation costs, while uniform dispersion occurs when these costs become negligibly small (i.e., when distance dies). In multi-regional geography, the network structure of production externalities can determine the geographical distribution of workers as economic integration increases. If production externalities are governed solely by geographical distance, a mono-centric spatial distribution emerges in the form of suburbanization. However, if geographically distant pairs of regions are connected through tight production linkages, multi-centric spatial distribution can be sustainable.

econ.GN↗

arXiv2021

Cities in a world of diminishing transport costs

Economic activities favor mutual geographical proximity and concentrate spatially to form cities. In a world of diminishing transport costs, however, the advantage of physical proximity is fading, and the role of cities in the economy may be declining. To provide insights into the long-run evolution of cities, we analyzed Japan's census data over the 1970--2015 period. We found that fewer and larger cities thrived at the national scale, suggesting an eventual mono-centric economy with a single megacity; simultaneously, each larger city flattened out at the local scale, suggesting an eventual extinction of cities. We interpret this multi-scale phenomenon as an instance of pattern formation by self-organization, which is widely studied in mathematics and biology. However, cities' dynamics are distinct from mathematical or biological mechanisms because they are governed by economic interactions mediated by transport costs between locations. Our results call for the synthesis of knowledge in mathematics, biology, and economics to open the door for a general pattern formation theory that is applicable to socioeconomic phenomena.

econ.GN↗

arXiv2020

Most likely retail agglomeration patterns: Potential maximization and stochastic stability of spatial equilibria

We study a model of retail agglomeration where consumers are more likely to visit zones with a higher concentration of shops. This agglomerative effect makes zones with many retailers more attractive. The spatial distribution of retailers in equilibrium is endogenously determined in response to the spatial pattern of shopping demand. In such a setting, multiple locally stable equilibria may arise, and the outcome can depend on the initial distribution of shops. To address this issue, we apply an approach from evolutionary game theory, selecting the equilibrium that maximizes a potential function representing the incentives of retailers. We demonstrate the method in a two-dimensional spatial setting. Compared to local stability based on gradual, myopic adjustments, this global maximization leads to a unique and more robust prediction. As expected, the number of retail clusters decreases either when shopping costs for immobile consumers fall or when the attractiveness of larger retail concentrations increases.

econ.TH↗

arXiv2019

Spatial scale of agglomeration and dispersion: Number, spacing, and the spatial extent of cities

How does transport cost affect the spatial organization of economic activities? This study develops a theoretical framework that distinguishes between two types of dispersion forces in spatial models: "local" dispersion forces acting within cities, and "global" dispersion forces acting across them. The distinction leads to a systematic classification of spatial models into a few fundamental types, each with distinct endogenous spatial patterns and comparative statics in response to changes in transport costs. The framework reconciles empirical findings and clarifies how transport-induced reorganization of economic activities can depend on the spatial scale of dominant dispersion forces.

econ.GN↗