Schelling’s model revisited: From segregation to integration

Abstract

Schelling (1969, 1971) presents a microeconomic model showing that the individual preferences can transform an integrated city into a rather segregated city, although no player prefers segregation. We study the impact of location heterogeneity on neighborhood segregation in the one-dimensional Schelling residential model. We model location heterogeneity by introducing an advantageous node, in which a player’s utility is impartial to the composition of her neighborhood. When every player interacts with two neighbors, we find that having one advantageous node in the circular city will lead to a result that segregation is no longer the unique long-run outcome. When players interact with more neighbors, more advantageous nodes are necessary to obtain the same result.