The constantly increasing size of cities encountered in the real world is in contrast with the famous 'optimal city size' theory, which envisages a size above which an increase in physical dimension decreases the advantages of agglomeration.
This evident paradox can be overcome either through the hypothesis of different production funcitions for each city or by expressing the neoclassical logic through the use of the Christaller model. In this second case, neoclassical logic leads to the definition of a hierarchical urban system. But the neoclassical city interpreted within the logic of Christaller is a theory without empirical application. The result achieved by the model is undoubtedly unrealistic.
The central place model is a territorial logic, emphasizing a gravity-type control of market areas, in the city network model, another logic prevails, referring to long-distance competition and co-operation regardless of the distance barrier. The city network concept may consists of three elements: (1)The network element (2) network externalities, (3) mutual cooperation element.
Research findings are summarized as follows. The medium sized cities appear to have a great endogenous capacity to keep social, economic and environmental costs under control. In case of level of network integration, we found out the existence of network externalities.