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Evolution of Workers’ Behaviour in Dual Labor Markets

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Artificial Life and Evolutionary Computation (WIVACE 2018)

Part of the book series: Communications in Computer and Information Science ((CCIS,volume 900))

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Abstract

The simultaneous increase in the use of temporary contracts and the productivity slowdown recently experienced in some OECD countries, fostered a growing interest in analysing the link between these phenomena.

In this paper we study the effect of the use of temporary contracts on workers’ incentives and in particular we focus on effort decisions of temporary workers. We implement an agent-based model where workers interact in the labor market and compete for permanent contracts. Workers choose how much effort to exert in production and, using reinforcement learning, they update their strategies on the basis of past experience.

The main result is that optimal effort strategies depend on the share of available permanent contracts. When the share is low, workers do not bet on their conversion and supply low effort. As the share increases workers exert higher effort but, when it is too high, they have the incentive to shirk since they are confident of being confirmed. Therefore, the relationship between the share of permanent contracts and workers’ effort, and consequently labor productivity, has an inverted-U-shape.

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Notes

  1. 1.

    For an introduction to complexity and agent-based models see [12] and [1].

  2. 2.

    In the formula \(\pi _i (S_i,S_{-i})\) is the payoff of worker i using strategy \(S_i\), when all other temporary workers are exerting strategy \(S_{-i}\).

  3. 3.

    Written in this way, the payoff is simple to interpret, but w, \(x_T\) and \(x_P\) are constant parameters therefore we could simplify the expression using just two different constants, one for each type of contract.

  4. 4.

    Equation (2.3) is known as Gibbs-Boltzmann probability measure, used for example in [13].

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Author information

Authors and Affiliations

  1. Department of Economics and Statistics, University Federico II of Naples, Via Cintia - Monte Sant’Angelo, 80126, Naples, Italy

    Shira Fano

  2. Department of Management, Ca’ Foscari University of Venice, Cannaregio 873, 30121, Venice, Italy

    Debora Slanzi

  3. European Centre for Living Technology, Dorsoduro 3911, Calle Crosera, 30123, Venice, Italy

    Debora Slanzi

Authors
  1. Shira Fano
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  2. Debora Slanzi
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Corresponding author

Correspondence to Shira Fano .

Editor information

Editors and Affiliations

  1. University of Parma, Parma, Italy

    Stefano Cagnoni

  2. University of Parma, Parma, Italy

    Monica Mordonini

  3. Università degli Studi eCampus, Novedrate, Italy

    Riccardo Pecori

  4. University of Bologna, Cesena, Italy

    Andrea Roli

  5. University of Modena and Reggio Emilia, Modena, Italy

    Marco Villani

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Fano, S., Slanzi, D. (2019). Evolution of Workers’ Behaviour in Dual Labor Markets. In: Cagnoni, S., Mordonini, M., Pecori, R., Roli, A., Villani, M. (eds) Artificial Life and Evolutionary Computation. WIVACE 2018. Communications in Computer and Information Science, vol 900. Springer, Cham. https://doi.org/10.1007/978-3-030-21733-4_4

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  • DOI: https://doi.org/10.1007/978-3-030-21733-4_4

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  • Publisher Name: Springer, Cham

  • Print ISBN: 978-3-030-21732-7

  • Online ISBN: 978-3-030-21733-4

  • eBook Packages: Computer ScienceComputer Science (R0)

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