Department of Economics Schelling ' s Spatial Proximity Model of Segregation Revisited

Schelling [1969, 1971a, 1971b, 1978] presented a microeconomic model showing how an integrated city could unravel to a rather segregated city, notwithstanding relatively mild assumptions concerning the individual agents' preferences, i.e., no agent preferring the resulting segregation. We examine the robustness of Schelling's model, focusing in particular on its driving force: the individual preferences. We show that even if all individual agents have a strict preference for perfect integration, bestresponse dynamics will lead to segregation. What is more, we argue that the onedimensional and two-dimensional versions of Schelling's spatial proximity model are in fact two qualitatively very different models of segregation. J.E.L. classification codes: C72, C73, D62.