A game-theoretic analysis of staggered versus synchronised wage setting

Article Abstract:

An analysis of two elements of the labor market institutions was performed. The aspects in question were staggered versus synchronized wage setting, and coordinated/centralized versus non-cooperative decentralized wage adjustment. The study related them to the ability to surpass the externalities in decentralized wage-setting. Results showed that wage setters who interact strategically and dynamically favor moving alternatingly since this enables them to temporarily commit not to outweigh the impact of each other's action. Synchronization is preferable if agents are able to coordinate.

Management, Compensation management, Wages, Wages and salaries

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Is Bayesian rationality compatible with strategic rationality?

Article Abstract:

Bayesian decision theory and strategic rationality are fundamentally incompatible. Under Bayesian game theory, the choices made by rational agents always conform to the Savage axioms, or their equivalent. Although game theoretically rational agents are believed to follow the same axioms, it was shown mathematically that the Savage axioms of ordering and dominance were in conflict with some principles of elementary game theory. This incompatibility is sufficient to warrant a 'divorce' between game theory and individual decision theory.

Bayesian statistical decision theory, Bayesian analysis, Games of strategy (Mathematics)

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