Schlag 1998, 1999; Offerman, Potters, and Sonnemans, 2002; Apesteguia, Huck, and
Oechssler, 2003; Dutta and Prasad, 2004; Anderson, Ellison and Fudenberg, 2005),
with interesting empirical applications as well.6 There is, however, very little in the
economics literature marrying these two themes of imitation and location choice.7
Venerable lines of economic research develop models of location choice (Hotelling,
1929; Alonso, 1964; Muth, 1968) as well as spatial agglomerations and their statis-
tical determinants (Konishi, 2005; Kobrin, 1985). The issue of ethnic enclaves and
spatial patterns resulting from individual decisions about where to move also relates
to the problem of imitation in location choice, at least from an abstract modeling
perspective (Gross and Schmitt, 2000; Huff, 1962). Not all those who analyze spa-
tial patterns focus on processes of agglomeration. Some argue that Hotelling-type
economies should produce dispersion rather than concentration (d’Aspremont and
Gabszewicz, 1979). Similarly, Kain (1968) focuses on decentralization (i.e., the undo-
ing of spatial agglomerations) and the unequal impacts of suburbanization on labor
market opportunities for blacks and other ethnic minorities. According to Glaeser,
Hanushek and Quigley (2004), Kain’s spatial explanations for persistently high un-
employment in minority neighborhoods played a large role in directing the attention
of economists to disparities based on race and ethnicity.
6 Rodgers (1952) describes dramatic spatial concentrations of steel production in the U.S., and the possibility that
these concentrations might undermine national security. Similarly, Rees (1978) describes spatial concentrations in the
rubber industry. Mansfield (1961) provides empirical evidence linking firms’ decisions to introduce new techniques of
production to the proportion of firms already using that technique, in line with widely used gravity models in the
social sciences. Geertz (1978) observes spatial agglomeration according to product type in bazaars in Algeria. Walcott
(1990) finds agglomerations of biotech firms in Atlanta suggestive of imitation as a strategy for coping with scarcity of
information. Fairen (1996) argues that imitative behavior may best explain why automobile manufacturers produce
very similar models of cars. And Seamans (2006) investigates spatial clustering in the cable television industry.
7One exception is the experimental Hotelling economy analyzed by Camacho-Cuena et al (2005), demonstrating
spatial agglomerations in the lab, but not always as the result of decision-making processes that follow the stan-
dard model. The international finance literature, too, frequently studies interdependencies among firms’ investment
decisions (Kindleberger, 1983), and imitation is an established theme in international trade (Schmitt, 1995).
22