Socially Optimal Dynamic Allocation in Core-Periphery Model with Economic Uncertainty

In this paper, we propose a Dynamic Social Optimal (DSO) migration model under economic uncertainty. The proposed migration model attempts to maximize expected net present value of the sum of consumer utility by controlling amount of migration flow. We show that the optimal migration strategy takes...

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Bibliographic Details
Published inINFRASTRUCTURE PLANNING REVIEW Vol. 25; pp. 245 - 254
Main Authors AKAMATSU, Takashi, OTAZAWA, Toshimori, YAMAZAKI, Shuichi
Format Journal Article
LanguageEnglish
Published Japan Society of Civil Engineers 30.09.2008
Subjects
Core-Periphery model
Dyanamic social optimal configuration
Economic uncertainty
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ISSN0913-4034
1884-8303
DOI10.2208/journalip.25.245

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Summary:In this paper, we propose a Dynamic Social Optimal (DSO) migration model under economic uncertainty. The proposed migration model attempts to maximize expected net present value of the sum of consumer utility by controlling amount of migration flow. We show that the optimal migration strategy takes the form of impulse control that depends on population and transportation cost. Comparing the equilibrium migration flow with the optimal one, we find that the direction of equilibrium migration flow is opposite to the direction of optimal one for medium transportation cost.
ISSN:0913-4034
1884-8303
DOI:10.2208/journalip.25.245