Strategic behaviour in Schelling dynamics: Theory and experimental evidence

Juan M. Benito-Ostolaza, Pablo Brañas-Garza and Penelope Hernandez ()
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Juan M. Benito-Ostolaza: Departamento de Economía.Universidad Pública de Navarra, Campus Arrosadia s/n. 31006 Pamplona. Navarra. Spain.
Authors registered in the RePEc Author Service: Juan Miguel Benito Ostolaza

No 1504, Working Papers from Department of Applied Economics II, Universidad de Valencia

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 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.

Keywords: Subgame perfect equilibrium; segregation; experimental games (search for similar items in EconPapers)
JEL-codes: C72 C9 R23 (search for similar items in EconPapers)
Date: 2015-05
New Economics Papers: this item is included in nep-cbe, nep-cse, nep-exp, nep-gth, nep-ore and nep-ure
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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http://repecsrv.uv.es/paper/RePEc/pdf/eec_1504.pdf First version, 2015 (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:eec:wpaper:1504

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