Strategic behavior in Schelling dynamics: A new result and experimental evidence
AbstractIn this paper we experimentally test Schelling's (1971) segregation model and confirm the striking result of segregation. In addition, we extend Schelling's model theo- retically by adding strategic behavior and moving costs. We obtain a unique subgame perfect equilibrium in which rational agents facing moving costs may find it optimal not to move (anticipating other participants' movements). This equilibrium is far for full segregation. We run experiments for this extended Schelling model. We find that the percentage of strategic players dramatically increases with the cost of moving and that the degree of segregation depends on the distribution of rational subjects.
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Bibliographic InfoPaper provided by University of Valencia, ERI-CES in its series Discussion Papers in Economic Behaviour with number 0312.
Date of creation: Mar 2012
Date of revision:
Subgame perfect equilibrium; segregation; experimental games;
Other versions of this item:
- Juan Miguel Benito & Pablo Branas-Garz & Penelope Hernandez & Juan A. Sanchis, 2011. "Strategic behavior in Schelling dynamics: A new result and experimental evidence," Working Papers 11-14, Chapman University, Economic Science Institute.
- NEP-ALL-2012-05-29 (All new papers)
- NEP-EXP-2012-05-29 (Experimental Economics)
- NEP-GTH-2012-05-29 (Game Theory)
- NEP-URE-2012-05-29 (Urban & Real Estate Economics)
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