Non-Employment Benefits and the Evolution of Worker-Employer Cooperation: Experiments with Real and Computational Agents

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 nonemployment 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. Disciplines Behavioral Economics | Business Administration, Management, and Operations | Income Distribution | Infrastructure | Other Public Affairs, Public Policy and Public Administration This report is available at Iowa State University Digital Repository: http://lib.dr.iastate.edu/econ_las_economicreports/1 Non-Employment BeneHts and the Evolution of Worker-Employer Cooperation: Experiments with Real and Computational Agents Mark Pingle University of Nevada at Reno Leigh Tesfatsion Iowa State University ISU Economic Report Series No. 55 June 2001 ISU Economic Report No, 55 Non-Employment Benefits and theEvolution ofWorker-Employer Cooperation: Experiments with Real and Computational Agents . Mark Pingle Department ofEconomics University ofNevada atReno, Reno, NV 89557-0016 http://unr.edii/hoiriepage/pingle/ [email protected]