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agglomeration process amenity differential amenity level assume assumption bell-shaped relationship CEPR commuting costs concentration Consider two asymmetric core-periphery structure degree of heterogeneity denoted differentiated product discrete choice theory economic development Economic Policy Research efficient configuration European Union existence factor falling transport costs farmers follows Fujita full agglomeration Hence higher holds impact implies indirect utility Insert Figure involves full dispersion Jean Tirole large region level of transport located logit low amenities marginal costs market outcome maximizing nominal wage differential number of firms numeraire Ottaviano parameters partial agglomeration population of workers probability distribution product differentiation Proposition quadratic equation re-dispersion readily verified result returns to scale show that taste social optimum spatial distribution spatial equity stable equilibria standard core-periphery model strong dispersion force sufficiently low symmetric regions symmetry breaking threshold Takatoshi Tabuchi taste heterogeneity Thisse trade costs University of Tokyo variety workers are heterogenous workers are homogenous zero