This program implements a labor market scenario where "reciprocity"
may play a role. The first movers (employers) make wage offers,
and the second movers (workers) choose effort levels, which are costly to the
workers but which benefit their employers.
The Nash equilibrium for selfish preferences in a one-shot game is to offer
the minimum possible effort, since the
wage is paid irrespective of effort.
| || || || || ||Efforts may be higher with fixed
matchings and lower effort costs. The game highlights
issues of reciprocity and strategy.|
Vecon Lab - September 1, 2014