Game Theory Research Paper
WAGE BARGAINING IN THE CONTEXT OF TWO PERSON BARGAINING MODELS
GAME THEORY TERM PAPER
Group B-20
Table of Contents TOC \o "1-3" \h \z \u EXECUTIVE SUMMARY PAGEREF _Toc395398461 \h 2INTRODUCTION PAGEREF _Toc395398462 \h 3NASH BRAGAINING SOLUTION……………………………………………………………………………………5
Is Migration a possible solution for Bihar labourers? PAGEREF _Toc395398463 \h 7BIBLIOGRAPHY PAGEREF _Toc395398464 \h 9
INTRODUCTIONIndia is a country with a population of more than 1.2 billion people as in the year 2014. In the past 80 years as a nation we have quadrupled leading to lack of employment opportunities and lower wages. Through this term paper we are trying to shed light at the wage discrimination between labourers from different states and the factors behind the same. Our focus will be on real life wage fixing situations between labourers and the landlords they work for. We also try to identify the asymmetries which may arise in the Nash bargaining solution which affects the bargaining power of the labourers. By the term wage bargaining we mean the discussions and negotiations held between the landlord and the labourer in order to come to an agreement on the level of wage rate.
Assumptions made:
Real life situation in the Indian scenario.
This is a two player bargaining model wherein
Player 1 is the unskilled labourer employed in the agricultural sector
Player 2 is the landlord who employs labourers in his land.
Both the players take decision individually and not collectively. Neither of the players communicates with one another to influence the decision of the other.
Each player’s aim is to maximise his payoff. Hence, it is assumed that players are flawless followers and perfect calculators of their best strategies. They not only focus on their immediate income but possible future cash inflows as well.
As the players are unskilled, wage determination is not on the basis of their talent but on various other external factors that shall be highlighted
GAME THEORY TERM PAPER
Group B-20
Table of Contents TOC \o "1-3" \h \z \u EXECUTIVE SUMMARY PAGEREF _Toc395398461 \h 2INTRODUCTION PAGEREF _Toc395398462 \h 3NASH BRAGAINING SOLUTION……………………………………………………………………………………5
Is Migration a possible solution for Bihar labourers? PAGEREF _Toc395398463 \h 7BIBLIOGRAPHY PAGEREF _Toc395398464 \h 9
INTRODUCTIONIndia is a country with a population of more than 1.2 billion people as in the year 2014. In the past 80 years as a nation we have quadrupled leading to lack of employment opportunities and lower wages. Through this term paper we are trying to shed light at the wage discrimination between labourers from different states and the factors behind the same. Our focus will be on real life wage fixing situations between labourers and the landlords they work for. We also try to identify the asymmetries which may arise in the Nash bargaining solution which affects the bargaining power of the labourers. By the term wage bargaining we mean the discussions and negotiations held between the landlord and the labourer in order to come to an agreement on the level of wage rate.
Assumptions made:
Real life situation in the Indian scenario.
This is a two player bargaining model wherein
Player 1 is the unskilled labourer employed in the agricultural sector
Player 2 is the landlord who employs labourers in his land.
Both the players take decision individually and not collectively. Neither of the players communicates with one another to influence the decision of the other.
Each player’s aim is to maximise his payoff. Hence, it is assumed that players are flawless followers and perfect calculators of their best strategies. They not only focus on their immediate income but possible future cash inflows as well.
As the players are unskilled, wage determination is not on the basis of their talent but on various other external factors that shall be highlighted
Bibliography: ttp://www.bihartimes.in/viewersvoice/2012/March/vv324.html Wage Rates In rural India, 2008-09, Ministry of Labour & Employment State wise notified wages for MGNREGA.