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ABSTRACT

This paper investigates skyscraper competition between New York City and Chicago. The urban economics literature is generally silent on strategic interaction between cities, yet skyscraper rivalry between these cities is a part of U.S. historiography. This paper tests whether there is, in fact, strategic interaction across cities. First, I find that each city has positive reaction functions with respect to the other city, suggesting strategic complementarity. In regard to zoning, I find that height regulations negatively impacted each city, but produced positive responses by the other city, providing evidence for strategic substitutability.