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Quantitative overeducation and cooperative game theory

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  • Hiller, Tobias

Abstract

Overeducation is an empirical phenomenon in two dimensions: qualitative and quantitative. Quantitative overeducation addresses a firm’s decision, to train more employees than needed. One explanation for this decision is modeled in this article—that of classical bargaining power. The main idea is that after investing in human capital the employer uses employees outside the firm to raise the bargaining power when he negotiates with the employees within the firm on how to share the profit of the firm. To model this, we use cooperative game theory for the first time. The labor market is modeled by a coalition structure and the payoffs are determined by the χ value (Casajus, 2009).

Suggested Citation

  • Hiller, Tobias, 2017. "Quantitative overeducation and cooperative game theory," Economics Letters, Elsevier, vol. 152(C), pages 36-40.
    • Handle: RePEc:eee:ecolet:v:152:y:2017:i:c:p:36-40
    DOI: 10.1016/j.econlet.2016.12.010
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    References listed on IDEAS

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    Cited by:

    1. Tobias Hiller, 2018. "On the Stability of Couples," Games, MDPI, vol. 9(3), pages 1-10, July.
    2. Tobias Hiller, 2023. "Training, Abilities and the Structure of Teams," Games, MDPI, vol. 14(3), pages 1-8, May.

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    More about this item

    Keywords

    Quantitative overeducation; Cooperative game theory; χ value; Shapley value;
    All these keywords.

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • M53 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Training

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