The Rich-Get-Richer Phenomenon in Today’s Richest Cities
This article describes the dynamic of the “Rich-get-Richer” in terms of wealthy cities, such as New York, San Francisco, etc. These cities act as nuclei, where the best of the best come together and centralize in one place. Different cities may act as hubs for different industries; for example, finance prospers in New York and filmmaking prospers in Los Angeles. The more successful these cities become, the bigger the allure to newcomers. The success and wealth of these cities appeals to other successful and wealthy people, further amplifying the riches of these hubs. The significance of these cities becomes evident when looking at soaring real estate prices. According to the article, purchasing an apartment in SOHO is equivalent to purchasing 20 properties in Nashville. Because Manhattan is so densely populated and in such high demand, land is unbelievably high-priced.
In class, we discussed how popularity follows the power law: F(k)=a/k^c , where a smaller exponent, c, indicates more common popular items. The Rich-get-Richer model is useful in understanding how power laws are so prevalent in our society. The popularity of an object, person, or idea can be amplified based on how popular it already is; people tend to copy selections made by others, which results in an exponential rise in favor of a particular decision. The example we went through in class involves web pages that are creating out-links with certain probabilities. The probability that a page links to an earlier page at random is p, and the probability that a page chooses an earlier page at random and links to that page’s chosen link is 1-p. With these guidelines in place, one can see how a page with many links can become increasingly more popular. These principles directly apply to the dynamics of today’s richest cities.