Not all Strangers are the Same: The Impact of Tolerance in Schelling Games

TL;DR

This paper extends Schelling's segregation model by incorporating tolerance levels among agents, analyzing how varying tolerance affects equilibrium existence and social welfare in strategic settings.

Contribution

It introduces a generalized model of Schelling games with tolerance levels based on type proximity, and studies equilibrium existence and social welfare outcomes.

Findings

Existence of equilibria depends on tolerance levels.

Higher tolerance can lead to more integrated equilibria.

Social welfare varies with agents' tolerance levels.

Abstract

Schelling's famous model of segregation assumes agents of different types who would like to be located in neighborhoods having at least a certain fraction of agents of the same type. We consider natural generalizations that allow for the possibility of agents being tolerant towards other agents, even if they are not of the same type. In particular, we consider an ordering of the types, and make the realistic assumption that the agents are in principle more tolerant towards agents of types that are closer to their own according to the ordering. Based on this, we study the strategic games induced when the agents aim to maximize their utility, for a variety of tolerance levels. We provide a collection of results about the existence of equilibria, and their quality in terms of social welfare.