A Game Theoretic Model of Iranian Labor Market
In this paper, we analyze the interactions among workers, employers, and the government in the Iranian labor market using game theory. For this purpose, different games among the factors affecting the labor market are analyzed in both static and dynamic situations. In each case, intervention and non-intervention of the government are also examined. Thus, four different types of games are studied, including a static game between worker and employer, without government intervention; a static game among workers, employers, and the government; a dynamic game between worker and employer, without government intervention; and a dynamic game among workers, employers, and the government. In the first three games, Nash equilibrium implies low productivity of worker, low employer’s profits, and high unemployment rate in which players want to maintain the status quo. However, in the dynamic game among workers, employers, and the government, the sub-game perfect equilibrium of the game can provide some conditions in which the labor market gets away from the low productivity situation
Dufwenberg, M. & Kirchsteiger, G. (2000). Reciporcity and Wage Undercutting. European Economic Review, 44, 1069-1078.
Flesch, J., Schoenmakers, G. & Verieze, K. (2009). Stochastic Games on a Product State Space. International Journal of Game Theory, 38, 263-289.
Gibbons, R. (1992). Game Theory for Applied Economists. Princeton: Princeton University Press.
Jones, C. & Simon, I. (2005). Wage determination under plan and early transition: Bulgarian evidence using matched employer–employee data. Journal of Comparative Economics, 33, 227–243.
Komeijani, A. & Memar Nejad. A. (2004). The importance of the Quality of Labor and R&D in Economic Growth. Trade Research Journal, 31, 1-31.
Mahmoudzadeh, M. & Asadi, F. (2007). Impacts of IT on the Growth of Labor Productivity in Iranian Economy. Trade Research Journal, 43, 153-184.
Mitrou, L. & Karyda, M. (2006). Emloyees’ Privacy vs. Employers’ Security: Can They Be Balanced?". Telematics and Informatics, 23, 164–178.
Mohammadi, T. & Akbari Fard, H. (2008). The Effects of Productivity Shocks on Economic Growth of Iran. Economic Researches of Iran, 35, 177-204.
Rabiee, M. (2009). The Effects of Innovation and Human Capital on Economic Growth. Knowledge and Development Journal, 26, 122-142.
Osborne. M & Rubinstein. R (1994). A Course in Game Theory. Massachusetts: The MIT Press.
Sadeghi, H. & Brumand, Y. (2012). Analysis of Relationship among Employee, Employer and Government Based on Game Theory. Economic Research Journal, 98, 51-67.
Shy, O. (1995). Industrial Organization: Theory and Applications. Massachusetts: The MIT Press
Wang, G. (2008). A game-theoretic model of the participants in the rural migrant workers’ work-related injury insurance system. Journal of US-China Public Administration, 5, 52-56.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
Authors who publish with this journal agree to the following terms:
1. Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License [CC BY-NC-ND 4.0] that allows others to share the work with an acknowledgment of the work's authorship and initial publication in this journal.
2. Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgment of its initial publication in this journal.
3. Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).