Workers Behavior and Labor Contract: An Evolutionary Approach

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Working paper
Victor Hiller
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This article investigates the co-evolution of labor relationships and work- ers preferences. According to recent experimental economics findings on so- cial preferences, the workforce is assumed to be heterogeneous. It is com- posed by both cooperative and non-cooperative workers. In addition, firms differ by the type of contract they offer (explicit or implicit). Finally, both the distribution of preferences and the degree of contractual completeness are endogeneized. Preferences evolve through a process of cultural transmis- sion and the proportion of implicit contracts is driven by an evolutionary process. The complementarity between the transmission of cooperation and the implementation of implicit contracts leads to multiple equilibria which allow for path-dependence. This property is illustrated by the evolutions of American and Japanese labor contracts during the twentieth century.
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