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Structure, Behavior, and Market Power in an Evolutionary Labor Market with Adaptive Search

Author

Listed:
  • Leigh Tesfatsion

    (Iowa State University)

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.

Suggested Citation

  • Leigh Tesfatsion, 2000. "Structure, Behavior, and Market Power in an Evolutionary Labor Market with Adaptive Search," Computational Economics 0004002, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpco:0004002
    Note: Type of Document - pdf; prepared on IBM PC - PC-TEX/; to print on HP/PostScript/; pages: 47 ; figures: included
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    File URL: https://econwpa.ub.uni-muenchen.de/econ-wp/comp/papers/0004/0004002.pdf
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    References listed on IDEAS

    as
    1. Tesfatsion, Leigh, 1995. "A Trade Network Game with Endogenous Partner Selection," ISU General Staff Papers 199505010700001034, Iowa State University, Department of Economics.
    2. McFadzean, David & Tesfatsion, Leigh, 1999. "A C++ Platform for the Evolution of Trade Networks," Computational Economics, Springer;Society for Computational Economics, vol. 14(1-2), pages 109-134, October.
    3. Tesfatsion, Leigh, 1999. "Hysteresis In An Evolutionary Labor Market With Adaptive Search," Economic Reports 18189, Iowa State University, Department of Economics.
    4. Tesfatsion, Leigh, 1998. "Preferential Partner Selection in Evolutionary Labor Markets: A Study in Agent-Based Computational Economics," Staff General Research Papers Archive 2048, Iowa State University, Department of Economics.
    5. Tesfatsion, Leigh, 1995. "How Economists Can Get Alife," Economic Reports 18196, Iowa State University, Department of Economics.
    6. Ashlock, Dan & Smucker, Mark & Stanley, E. Ann & Tesfatsion, Leigh, 1994. "Preferential Partner Selection in an Evolutionary Study of Prisoner's Dilemma," ISU General Staff Papers 199409010700001033, Iowa State University, Department of Economics.
    7. Roth, Alvin E. & Sotomayor, Marilda, 1992. "Two-sided matching," Handbook of Game Theory with Economic Applications, in: R.J. Aumann & S. Hart (ed.), Handbook of Game Theory with Economic Applications, edition 1, volume 1, chapter 16, pages 485-541, Elsevier.
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    11. Bresnahan, Timothy F., 1989. "Empirical studies of industries with market power," Handbook of Industrial Organization, in: R. Schmalensee & R. Willig (ed.), Handbook of Industrial Organization, edition 1, volume 2, chapter 17, pages 1011-1057, Elsevier.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Labor market dynamics; Market power; Capacity; Concentration; Adaptive search; Networks; Endogenous interactions; Agent-based computational economics; Evolutionary game;
    All these keywords.

    JEL classification:

    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • D4 - Microeconomics - - Market Structure, Pricing, and Design
    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • C6 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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