Munich Personal RePEc Archive

To Work or Not? Simulating Inspection Game with Labor Unions

Steinbacher, Matej and Steinbacher, Matjaz and Steinbacher, Mitja (2009): To Work or Not? Simulating Inspection Game with Labor Unions.

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Abstract

The model of social network is used to analyze the impact of the power of labor unions in the labor relations. We find that labor union capable to affect a pecuniary compensation of shirking employees lessens the motivation of employees to work and improve to the unionization rate. As a result, the performance of the firm is significantly deteriorated and its existence endangered. On the other hand, the inspection proved to be a successful method for “motivating” employees to work. By using non-omniscient agents, we also estimated the cost of that non-omniscience, which proved to be significant in all cases.

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