Title

Structure, behavior, and market power in an evolutionary labor market with adaptive search

Campus Units

Economics

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

2001

Journal or Book Title

Journal of Economic Dynamics and Control

Volume

25

Issue

3-4

First Page or Article ID Number

419

Last Page

457

DOI

10.1016/S0165-1889(00)00032-4

Abstract

This study uses an agent-based computational labor market framework to experimentally study the relationship between job capacity, job concentration, and market power. Job capacity is measured by the ratio of potential job openings to potential work offers, and job concentration is measured by the ratio of work suppliers to employers. For each experimental treatment, work suppliers and employers repeatedly seek preferred worksite partners based on continually updated expected utility, engage in efficiency-wage worksite interactions modelled as prisoner's dilemma games, and evolve their worksite behaviors over time. The main finding is that job capacity consistently trumps job concentration when it comes to predicting the relative ability of work suppliers and employers to exercise market power.

JEL Classification

C6, C7, J6, L1

Comments

This is a working paper of an article from Journal of Economic Dynamics and Control 25 (2001): 419, doi:10.1016/S0165-1889(00)00032-4