Strategic behavior in Schelling dynamics: A new result and experimental evidence
Juan Benito (),
Penelope Hernandez () and
Juan A. Sanchis Llopis ()
No 312, Discussion Papers in Economic Behaviour from University of Valencia, ERI-CES
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)
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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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