Thomas Schelling's Segregation Model...

I am beginning to put together some notes, models, and slides that could be used to teach Economics 101 complexity style.  My goal is to come up with material that could be taught to enterprising first year undergraduates...

Lesson One: Micromotives and Macrobehavior...

• People interacting with one another using simple decision rules can generate complex behavioral patterns for society as a whole.  
• Use Thomas Schelling's segregation model from 1978 to demonstrate the point
• A nice Java version of the his model can be found here
• The key parameter to play with is the minimum percent of neighbors that an individual prefers to be of the same type as himself (i.e., red, green, poor, rich, smart, dumb...whatever)

If you play around with the Java applet, set the percent similar to 40% (i.e., an individual is willing to tolerate a majority (up to 60%) of the "other" type) and see what happens...hint: it's not called the segregation model for nothing!

What does this teach first year undergraduates about economics?  I would say a several important things:

1. Economics is a social science: People interact in more ways than simply through the price vector.  People interact with one another over time and space, and these interactions are often important determinants of macro behavior. 
2. Dynamics are an important if one seeks to understand economic behavior.
3. Simple behavioral rules at the micro level can engender quite complex, and in this case unintended, behaviors at the macro level.
4. Related to point 3, aggregation in social systems can be tricky business!

There are probably better ways to formulate these points/make them simpler by not using so much jargon...will have to work on that...comments/criticsim is much appreciated!