Document Type

Report

Publication Date

6-2001

Number

55

Abstract

Experiments with real and computational agents are used to examine the impact of changing the level of a non-employment payoff on the evolution of cooperation between workers and employers participating in a sequential employment game with incomplete contracts. Workers either direct work offers to preferred employers or choose unemployment. and receive the non-employment payoff. Subject to capacity limitations, employers either accept work offers from preferred workers or remain-vacant' and receive the non-employment payoff. Matched workers and. employers participate in an employment relationship modeled as a prisoner's dilemma game. • In both types of experiments, increases in the non-employment payoff result in higher unemployment and vacancy rates while at the same time encouraging higher rates of cooperation among the workers and . employers who do form matches. However, the behaviors exhibited by the computational agents are coordinated to a higher degree than the behaviors of .the human subjects.. This difference , raises. challenging questions for both human-subject and computational experimentalists.