How do demand externalities drive the joint patterns of agglomeration, sorting, and differentiation within the non-tradable economy? Using the universe of establishment histories in Madrid, we document systematic heterogeneity in spatial organization. Sectors such as restaurants and bars feature distinct high-density clusters characterized by fierce competition, high turnover, and intense product differentiation—measured via text embeddings of customer-facing names. In contrast, sectors like supermarkets and gyms exhibit dispersed patterns with lower churn and uniform differentiation. We posit that these sorting patterns are governed by the degree of demand spillovers across establishments: sectors characterized by consumption complementarities outbid others for high-demand hubs, where they form dense districts defined by fierce competition. Sectors lacking these externalities disperse to minimize local cannibalization.

What motivates denunciation in repressive regimes? Becoming an informer involves effort and potential social costs if one's identity is discovered. We investigate whether informers are primarily driven by ideological conviction, personal animosities, or expectations of material rewards from the regime. We draw on a unique corpus of more than 5,000 case instructions from the Spanish Inquisition in the 18th century, which include detailed testimonies from informers, defendants, and witnesses. We use natural language processing to analyze these testimonies quantitatively and characterize informer motivation.