In the first essay, I explore the rise of decentralization and polycentrism in cities and questions of optimality. This paper proposes a model that generates development before the optimal time due to competing developers. When new developments are able to specialize in particular industries that attract heterogeneous workers, the developments differ in profitability due to workers' different willingness to pay for land and housing. The developers wish to gain the "first mover advantage" to build the more profitable development, and developing sooner than what is optimal does this. This preemptive theory of competition offers a result that cities are more decentralized and polycentric than what is optimal.;The second essay extends Farrell and Shapiro (1990) and Levin (1990) by providing necessary and sufficient conditions for horizontal mergers to be both profitable and welfare-enhancing when market demand and firms' costs are linear. We show that profitable, welfare-enhancing mergers are likely to involve firms whose combined pre-merger market shares exceed 50%, and that mergers may be profitable and welfare-enhancing even when they do not generate any direct cost efficiencies. Our results suggest that any approach to evaluating the welfare effects of horizontal mergers that does not account for industry-wide strategic effects is seriously flawed.;Finally, the third essay returns to city development. Sprawl and low urban density are often considered challenges to the vitality and relevance metropolitan areas. This paper examines how competition between new developments causes development to occur too quickly compared to welfare maximizing development. Early development causes land to be sold in larger lots to a smaller number of buyers, causing lower population density. Competition in a timing game among developers causes early development, lower population density and lower capital density.
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