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Determination of Wages and Exchange Rate with Game Theory

Author

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  • Vida VARAHRAMI

    (University of Shahid Beheshti, Iran.)

Abstract

In every country, wages are determined by Nash rule or governments determine wages. According to Nash equilibrium, policy of determination wages is respect to exchange rate and there is a game between NWC and MAS. In this paper, we survey a game theory method to survey policy of determination wages and exchange rate to stability economics. When exchange rate increases, import good's price rise and we have cost push inflation, therefore wages are increased and then we have unemployment. Then wages are determined respect to exchange rate changes. But in real world, some conditions affected on Nash equilibrium and wages are determined as non Nash method and government equals between benefits of workers and principals. In this paper, we survey wage making in Iran and reveal that in some courtiers such as Iran, government determines wages and create equilibrium in labor market.

Suggested Citation

  • Vida VARAHRAMI, 2015. "Determination of Wages and Exchange Rate with Game Theory," Journal of Economic and Social Thought, KSP Journals, vol. 2(4), pages 275-280, December.
    • Handle: RePEc:ksp:journ3:v:2:y:2015:i:4:p:275-280
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    References listed on IDEAS

    as
    1. Ying Wu & Kuang Hui Goh & Boon Keng Lee, 2004. "The Interplay of Wage and Exchange Rate Policies in Singapore: A Case of Collective Bargaining in Macroeconomic Management," Contemporary Economic Policy, Western Economic Association International, vol. 22(1), pages 39-49, January.
    2. Alwyn Young, 1992. "A Tale of Two Cities: Factor Accumulation and Technical Change in Hong Kong and Singapore," NBER Chapters, in: NBER Macroeconomics Annual 1992, Volume 7, pages 13-64, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Wage; Exchange rate; Nash Equilibrium; Inflation; Game theory method.;
    All these keywords.

    JEL classification:

    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q31 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Demand and Supply; Prices
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development

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