Abstract
We study first-order logic with two variables FO² and establish a small substructure property. Similar to the small model property for FO² we obtain an exponential size bound on embedded substructures, relative to a fixed surrounding structure that may be infinite. We apply this technique to analyse the satisfiability problem for FO² under constraints that require several binary relations to be interpreted as equivalence relations. With a single equivalence relation, FO² has the finite model property and is complete for non-deterministic exponential time, just as for plain FO² With two equivalence relations, FO² does not have the finite model property, but is shown to be decidable via a construction of regular models that admit finite descriptions even though they may necessarily be infinite. For three or more equivalence relations, FO² is undecidable