eprintid: 13640
rev_number: 6
eprint_status: archive
userid: 5
dir: disk0/00/01/36/40
datestamp: 2016-08-09 11:13:40
lastmod: 2021-08-27 17:27:35
status_changed: 2016-08-09 11:13:40
type: article
metadata_visibility: show
item_issues_count: 1
creators_name: Caulkins, J.p.
creators_name: Feichtinger, G.
creators_name: Grass, D.
creators_name: Hartl, R.F.
creators_name: Kort, P.M.
creators_name: Novak, A.J.
creators_name: Seidl, A.
creators_name: Wirl, F.
creators_id: 1555
creators_id: AL1057
title: A Dynamic Analysis of Schelling’s Binary Corruption Model: A Competitive Equilibrium Approach
ispublished: pub
divisions: prog_asa
keywords: corruption; Schelling diagram; intertemporal competitive equilibria; thresholds; history versus expectations
abstract: Schelling (in Micromotives and Macrobehavior, Norton, New York, 1978) suggested a simple binary choice model to explain the variation of corruption levels across societies. His basic idea was that the expected profitability of engaging in corruption depends on its prevalence. The key result of the so-called Schelling diagram is the existence of multiple equilibria and a tipping point. The present paper puts Schelling’s essentially static approach into an intertemporal setting. We show how the existence of an unstable interior steady state leads to thresholds such that history alone or history in addition to expectations (or coordination) is necessary to determine the long-run outcome. In contrast to the related literature, which classifies these two cases according to whether the unstable equilibrium is a node or a focus, the actual differentiation is more subtle because even a node can lead to an overlap of solution paths such that the initial conditions alone are insufficient to uniquely determine the competitive equilibrium. Another insight is that a (transiently) cycling competitive equilibrium can dominate the direct and monotonic route to a steady state, even if the direct route is feasible.
date: 2014-05
date_type: published
publisher: Springer US
id_number: 10.1007/s10957-013-0420-7
creators_browse_id: 2589
creators_browse_id: 2248
full_text_status: none
publication: Journal of Optimization Theory and Applications
volume: 161
number: 2
pagerange: 608-625
refereed: TRUE
issn: 0022-3239
coversheets_dirty: FALSE
fp7_type: info:eu-repo/semantics/article
citation:   Caulkins, J.p., Feichtinger, G. <https://pure.iiasa.ac.at/view/iiasa/2589.html>, Grass, D., Hartl, R.F., Kort, P.M., Novak, A.J. <https://pure.iiasa.ac.at/view/iiasa/2248.html>, Seidl, A., & Wirl, F.  (2014).  A Dynamic Analysis of Schelling’s Binary Corruption Model: A Competitive Equilibrium Approach.   Journal of Optimization Theory and Applications 161 (2) 608-625. 10.1007/s10957-013-0420-7 <https://doi.org/10.1007/s10957-013-0420-7>.