Benito, Juan Miguel; Branas-Garz, Pablo; Hernandez, Penelope - Economic Science Institute (ESI), Argyros School of … - 2011
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 behavior and moving costs. We obtain a unique subgame perfect equilibrium in which rational...