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Zero-intelligence agents looking for a job

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Abstract

We study a simple agent-based model of a decentralized matching market game in which agents (workers or job seekers) make proposals to other agents (firms) in order to be matched to a position within the firm. The aggregate result of agents interactions can be summarised in the form of a Beveridge curve, which determines the relationship between unmatched agents, unemployed job seekers and vacancies in firms. We open the black box of matching technology, by modelling how agents behave (make proposals) according to their information perception. We observe more efficient results—in the form of a downward shift of the Beverage curve in the case of simple zero-intelligent agents. Our comparative statics indicate that market conditions, such as the heterogeneity of agents’ preferences, will also shift the Beveridge curve downwards. Moreover, market thickness affects movement along the Beverage curve. Movement right-down along the curve if there is an increasing number of agents compared to positions within firms. Furthermore, we show that frictions in re-matching, such as commitment to a match, could be another factor shifting the Beveridge curve toward the origin.

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Acknowledgements

We thank Péter Biró for helpful comments during the early stages of this work and also the participants of the Santa Fe Institute Complex Systems Summer School 2015 for fruitful discussions. We are also grateful of constructive feedback from two anonymous referees, based on which the paper was significantly improved.

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Authors and Affiliations

  1. Tallinn University of Technology, Tallinn, Estonia

    André Veski

  2. Estonian Business School, Tallinn, Estonia

    Kaire Põder

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  1. André Veski
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  2. Kaire Põder
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Correspondence to André Veski.

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Veski, A., Põder, K. Zero-intelligence agents looking for a job. J Econ Interact Coord 13, 615–640 (2018). https://doi.org/10.1007/s11403-017-0198-z

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