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.

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: social networks, inspection game, evolutionary games
• Subjects: D - Microeconomics > D2 - Production and Organizations > D21 - Firm Behavior: Theory; J - Labor and Demographic Economics > J5 - Labor-Management Relations, Trade Unions, and Collective Bargaining > J51 - Trade Unions: Objectives, Structure, and Effects; Z - Other Special Topics > Z1 - Cultural Economics ; Economic Sociology ; Economic Anthropology > Z13 - Economic Sociology ; Economic Anthropology ; Social and Economic Stratification; C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C73 - Stochastic and Dynamic Games ; Evolutionary Games ; Repeated Games

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