Buzz: face-to-face contact and the urban economy

This paper argues that existing models of urban concentrations are incomplete unless grounded in the most\nfundamental aspect of proximity; face-to-face contact. Face-to-face contact has four main features; it is an\nefficient communication technology; it can help solve incentive problems; it can facilitate socialization and\nlearning; and it provides psychological motivation. We discuss each of these features in turn, and develop\nformal economic models of two of them. Face-to-face is particularly important in environments where\ninformation is imperfect, rapidly changing, and not easily codified, key features of many creative activities.