Game Theory, Location Theory and Industrial Agglomeration

Abstract

A classic problem in location theory and regional science is industrial agglomeration. Alfred Weber first posed this problem neatly in 1909 in his major book on the location of industry.¹ There he pointedly discussed the problem of agglomerating several plants producing a homogeneous commodity. More recently, the problem has emerged in a broader context, which I find particularly interesting — namely, the fostering in a consistent and efficient manner of the development of an industrial agglomeration in each of several regions of a nation, or in each of several nations of a common market system. The problem in a common market framework is especially fascinating, and of course is in keeping with the particular attention which we have been giving to common market issues in our recent European Regional Science Congresses.