@techreport{NBERw9528,
 title = "Knife Edge of Plateau: When Do Market Models Tip?",
 author = "Glenn Ellison and Drew Fudenberg",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "9528",
 year = "2003",
 month = "March",
 URL = "http://www.nber.org/papers/w9528",
 abstract = {This paper studies whether agents must agglomerate at a single location in a class of models of two-sided interaction. In these models there is an increasing returns effect that favors agglomeration, but also a crowding or market-impact effect that makes agents prefer to be in a market with fewer agents of their own type. We show that such models do not tip in the way the term is commonly used. Instead, they have a broad plateau of equilibria with two active markets, and tipping occurs only when one market is below a critical size threshold. Our assumptions are fairly weak, and are satisfied in Krugman's [1991b] model of labor market pooling, a heterogeneous-agent version of Pagano's [1989] asset market model, and Ellison, Fudenberg and M”bius's [2002] model of competing auctions.},
}