Cities at Play: Improving Equilibria in Urban Neighbourhood Games

Fuente: arXiv
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Hauptverfasser: Gairing, Martin, Vetta, Adrian, Zhao, Zhanzhan
Format: Preprint
Veröffentlicht: 2026
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author Gairing, Martin
Vetta, Adrian
Zhao, Zhanzhan
author_facet Gairing, Martin
Vetta, Adrian
Zhao, Zhanzhan
contents How should cities invest to improve social welfare when individuals respond strategically to local conditions? We model this question using a game-theoretic version of Schelling's bounded neighbourhood model, where agents choose neighbourhoods based on concave, non-monotonic utility functions reflecting local population. While naive improvements may worsen outcomes - analogous to Braess' paradox - we show that carefully designed, small-scale investments can reliably align individual incentives with societal goals. Specifically, modifying utilities at a total cost of at most $0.81 ε^2 \cdot \texttt{opt}$ guarantees that every resulting Nash equilibrium achieves a social welfare of at least $ε\cdot \texttt{opt}$, where $\texttt{opt}$ is the optimum social welfare. Our results formalise how targeted interventions can transform supra-negative outcomes into supra-positive returns, offering new insights into strategic urban planning and decentralised collective behaviour.
format Preprint
id arxiv_https___arxiv_org_abs_2601_08642
institution arXiv
publishDate 2026
record_format arxiv
spellingShingle Cities at Play: Improving Equilibria in Urban Neighbourhood Games
Gairing, Martin
Vetta, Adrian
Zhao, Zhanzhan
Computer Science and Game Theory
Theoretical Economics
How should cities invest to improve social welfare when individuals respond strategically to local conditions? We model this question using a game-theoretic version of Schelling's bounded neighbourhood model, where agents choose neighbourhoods based on concave, non-monotonic utility functions reflecting local population. While naive improvements may worsen outcomes - analogous to Braess' paradox - we show that carefully designed, small-scale investments can reliably align individual incentives with societal goals. Specifically, modifying utilities at a total cost of at most $0.81 ε^2 \cdot \texttt{opt}$ guarantees that every resulting Nash equilibrium achieves a social welfare of at least $ε\cdot \texttt{opt}$, where $\texttt{opt}$ is the optimum social welfare. Our results formalise how targeted interventions can transform supra-negative outcomes into supra-positive returns, offering new insights into strategic urban planning and decentralised collective behaviour.
title Cities at Play: Improving Equilibria in Urban Neighbourhood Games
topic Computer Science and Game Theory
Theoretical Economics
url https://arxiv.org/abs/2601.08642