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Strategic behaviour in Schelling dynamics: Theory and experimental evidence

Listed author(s):
  • Juan M. Benito-Ostolaza

    (Departamento de Economía.Universidad Pública de Navarra, Campus Arrosadia s/n. 31006 Pamplona. Navarra. Spain.)

  • Pablo Brañas-Garza

    (Middlesex University London, Business School, London NW4 4BT, England.)

  • Penélope Hernández

    (Departamento de Análisis Económico y ERI-CES, Facultad de Economía. Avda. dels Tarongers, s/n. 46022 Valencia. Spain.
    ERI-CES and Department of Applied Economics II, University of Valencia. Facultad de Economía. Avenida dels Tarongers s/n, 46022 Valencia, Spain.)

In this paper we experimentally test Schelling’s (1971) segregation model and confirm the striking result of segregation. In addition, we extend Schelling’s model theoretically by adding strategic behaviour 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 from full segregation. We run experiments for this extended Schelling model, and find that the percentage of full segregated societies notably decreases with the cost of moving and that the degree of segregation depends on the distribution of strategic subjects.

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File URL: ftp://147.156.210.157/RePEc/pdf/eec_1504.pdf
File Function: First version, 2015
Download Restriction: no

Paper provided by Department of Applied Economics II, Universidad de Valencia in its series Working Papers with number 1504.

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Date of creation: May 2015
Handle: RePEc:eec:wpaper:1504
Contact details of provider: Postal:
Edifici Departamental Oriental, Campus dels Tarongers, Avda. dels Tarongers, S/N (4P15), 46022 - València

Phone: 963 82 83 49
Fax: 963 82 83 54
Web page: http://www.estructuraeconomica.es
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  1. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, July.
  2. David Card & Alexandre Mas & Jesse Rothstein, 2008. "Tipping and the Dynamics of Segregation," The Quarterly Journal of Economics, Oxford University Press, vol. 123(1), pages 177-218.
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  13. Schelling, Thomas C, 1969. "Models of Segregation," American Economic Review, American Economic Association, vol. 59(2), pages 488-493, May.
  14. Ariel Rubinstein, 2007. "Instinctive and Cognitive Reasoning: Response Times Study," Levine's Bibliography 321307000000001011, UCLA Department of Economics.
  15. Milchtaich, Igal & Winter, Eyal, 2002. "Stability and Segregation in Group Formation," Games and Economic Behavior, Elsevier, vol. 38(2), pages 318-346, February.
  16. H. Peyton Young, 2009. "Innovation Diffusion in Heterogeneous Populations: Contagion, Social Influence, and Social Learning," American Economic Review, American Economic Association, vol. 99(5), pages 1899-1924, December.
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