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You might misunderstand what a model is supposed to do in such research papers. Schelling's model elucidates a mechanism where small individual preferences (pr

by zwaps 5y ago

You might misunderstand what a model is supposed to do in such research papers. Schelling's model elucidates a mechanism where small individual preferences (probably not even worth calling a 1/3rd preference a "bias") lead to segregated aggregate outcomes. Models can isolate mechanisms. Other such examples might show stuff like - separating good from bad candidates requires a condition on the visibility and cost of effort e.g. in education, but not usefulness (a degree need not be useful for the job to do its work) - some scheme to build a public good (like a bridge) will never be cost neutral - two people who would benefit from selling to each other may never find a way to contract because of two sided information asymmetries - your choice of auction modality does not affect your revenue etc. Many of those things are "obvious", but before we understood the mechanism, we had all sorts of wild theories. This goes doubly for segregation. Now we know - no one needs to prefer segregation for it to exist. Think model like "cube in vacuum", rather than model like "predicting who likes which Amazon Prime series". Game theoretic models in particular do this "one weird move" very different from predictive modeling: They do not really tell us how reality would reach the equilibrium state. Like, if our model allows iterative best-replies, is that really what people would do in reality? Probably not, right? And that's actually the point: Predicting human behavior based on some sort of "physical" model has failed in 100% of the cases. People aren't particles. Instead, one should take these models in the following sense: If people interact, what can't be a stable outcome and why? If a stable outcome were to be reached, what would have to be true? Flipping the logic in that way leads to these game theoretic models. One then learns about these mechanisms and understands reality better. For example: Schelling has helped me understand the phenomenon of segregated exchange student groups at European universities. People come from all sorts of places in European and abroad, usually with the genuine desire to meet other cultures. So we can assume segregation is not what they want. Yet, at the end of the semester, you sometimes end up with relatively cohesive groups (I remember Spanish and Latin Americans, Chinese groups) In other instances, there were no such groups at all. Schelling's work gives you some idea as to what might be going on.

ZeroGravitas 5y ago
Yes, the famously thorny problem of why people who come from the same different country and natively speak the same foreign language might hang out together in college. Thank goodness the piercing logic of Game Theory managed to unravel this enigma for us. And, in America, in 1971, you would obviously name this important scientific discovery the "segregation" model because thats a word you use when talking about social cliques in foreign students. Might as well have called it the "Why did the Nazi Germany-era jews choose to live in the ghetto?" model if we were going to be that tone deaf about it. Look, Game Theory is cool and nerdy, but like most parts of economics it's often used as a weapon. Let's not be niave.
- zwaps 5y ago
  What a weird take, but I do enjoy you make it, because it proves my point: From your perspective, it is a simple mechanism. People speak the same language, so they must hang out together. As I already explained, Game Theory can be good to check these naive inferences. Indeed, I have given some examples where results are counter-intuitive (but then obvious, once we understand the mechanism). Schelling is one: You'd think that if people prefer a diverse group of friends with only a little homogeneity, you'd never see a segregated society. In the case of college groups, the hint was that sometimes we get these cohesive groups, but other times we don't. And yet, each year, students speak the same languages and arrive in comparable amounts. If what you said was true, there'd be no such variation. Something else might be going on. In any case, I want to be clear here that trying to understand "strategic interaction", the effects of complex inter-dependencies and their sometimes counter-intuitive results, is not a justification for morally or ethically unjustified behavior. Even if it can certainly be used in that way. Indeed, in my frequent posts on mechanism design, you will see me fiercely criticizing our lax and relaxed treatment of how companies vaccuum in more and more data and develop better and better models to work around information asymmetries and appropriate consumer welfare. I happily take an even more interventionist stance when it comes to issues of segregation, sustainability and inclusion. Not sure if you were accusing me specifically, but better let this be said.

by zwaps 5y ago

ZeroGravitas 5y ago

Yes, the famously thorny problem of why people who come from the same different country and natively speak the same foreign language might hang out together in college. Thank goodness the piercing logic of Game Theory managed to unravel this enigma for us. And, in America, in 1971, you would obviously name this important scientific discovery the "segregation" model because thats a word you use when talking about social cliques in foreign students. Might as well have called it the "Why did the Nazi Germany-era jews choose to live in the ghetto?" model if we were going to be that tone deaf about it. Look, Game Theory is cool and nerdy, but like most parts of economics it's often used as a weapon. Let's not be niave.

zwaps 5y ago
What a weird take, but I do enjoy you make it, because it proves my point: From your perspective, it is a simple mechanism. People speak the same language, so they must hang out together. As I already explained, Game Theory can be good to check these naive inferences. Indeed, I have given some examples where results are counter-intuitive (but then obvious, once we understand the mechanism). Schelling is one: You'd think that if people prefer a diverse group of friends with only a little homogeneity, you'd never see a segregated society. In the case of college groups, the hint was that sometimes we get these cohesive groups, but other times we don't. And yet, each year, students speak the same languages and arrive in comparable amounts. If what you said was true, there'd be no such variation. Something else might be going on. In any case, I want to be clear here that trying to understand "strategic interaction", the effects of complex inter-dependencies and their sometimes counter-intuitive results, is not a justification for morally or ethically unjustified behavior. Even if it can certainly be used in that way. Indeed, in my frequent posts on mechanism design, you will see me fiercely criticizing our lax and relaxed treatment of how companies vaccuum in more and more data and develop better and better models to work around information asymmetries and appropriate consumer welfare. I happily take an even more interventionist stance when it comes to issues of segregation, sustainability and inclusion. Not sure if you were accusing me specifically, but better let this be said.