We introduce a closed form behavioural stochastic Arrow-Pratt risk process, decomposed into discrete asymmetric risk seeking and risk averse components that run on different local times in ϵ-disks centered at risk free states. Additionally, we embed Arrow-Pratt (“AP”) risk measure in a...

This paper studies the question of how well we understand segregation. The point of departure is Schelling’s spatial proximity model in one dimension. By introducing noise I show that segregation emerges as the long run prediction of neighborhood evolution, both when residents have...