Vecon Lab Reciprocity Game: Introduction

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 - August 27, 2014