Analysis of Relationship between Employee, Employer, and Government Based on Game Theory



This paper aims to analyze the relationship among the employee, the employer, and the government with the help of game theory. The game among these three players is of the sort of static games with complete information and the strategies used by each player have been determined in the figure of tending to change the current situation and tending to keep it. The equilibrium among this three players is a type of Nash equilibrium, that all players select strategy of tending to keep the current situation, although it doesn’t involve the maximum pay off for them. So the reason of this action is that the selection of the strategy of tending to change the current situation will be a risky one. And as risk is significant, they prefer to achive an equilibrium in low productivity.
JEL Classification: C7, J17, J24, O15, O38