Schelling [1969, 1971a, 1971b, 1978] presented a microeconomic model showing how an integrated city could unravel to a rather segregated city, notwithstanding relatively mild assumptions concerning the individual agents' preferences, i.e., no agent preferring the resulting segregation. We examine the robustness of Schelling's model, focusing in particular on its driving force: the individual preferences. We show that even if all individual agents have a strict preference for perfect integration, best-response dynamics will lead to segregation. What is more, we argue that the one-dimensional and two-dimensional versions of Schelling's spatial proximity model are in fact two qualitatively very different models of segregation.
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Find related papers by JEL classification: C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games D62 - Microeconomics - - Welfare Economics - - - Externalities
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