Strategic behavior in Schelling dynamics: A new result and experimental evidence

Juan Benito Ostolaza, Pablo Brañas-Garza, Penelope Hernandez () and Juan A. Sanchis Llopis ()

No 312, Discussion Papers in Economic Behaviour from University of Valencia, ERI-CES

Abstract: 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 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.

Keywords: Subgame perfect equilibrium; segregation; experimental games (search for similar items in EconPapers)
Date: 2012-03
New Economics Papers: this item is included in nep-exp, nep-gth and nep-ure
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https://www.uv.es/erices/RePEc/WP/2012/0312.pdf (application/pdf)

Related works:
Journal Article: Strategic behaviour in Schelling dynamics: Theory and experimental evidence (2015)
Working Paper: Strategic behavior in Schelling dynamics: A new result and experimental evidence (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:dbe:wpaper:0312

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