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The Harris-Todaro labor Allocation Mechanism as an Evolutionary Game

Author

Listed:
  • Jaylson Jair da Silveira

    (UNESP)

  • João Rogério Sanson

    (UFSC)

Abstract

The Harris-Todaro model is reinterpreted under an evolutionary game approach, including the behavior of migrants under bounded rationality in a process of imitation or learning. A first feature is an improvement upon Harris-Todaro by replacing the sign-preserving function of the adjustment mechanism by a replicator dynamics. The worker's decision to migrate to the urban area depends upon the expected differential between urban and rural wage. However, the probability associated to getting a job in the traditional, or formal, sector, which defines the expected urban wage, is itself endogenous, since it is affected by migration. Besides, the worker is myopic in forming expectations, having only one period as the planning horizon. This implies bounded rationality on the part of the migrant worker. The migratory movement of workers is interpreted as a process of imitation or learning. A second basic feature of the model is an interpretation of the equilibrium condition as a mixed strategy equilibrium of an evolutionary game. In this game, a replicator dynamics is a result instead of a postulate, as is the case of the dynamic adjustment mechanism of the original model. Here it appears as a spontaneous result from the interaction of heterogeneous workers
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Suggested Citation

  • Jaylson Jair da Silveira & João Rogério Sanson, 2003. "The Harris-Todaro labor Allocation Mechanism as an Evolutionary Game," Anais do XXXI Encontro Nacional de Economia [Proceedings of the 31st Brazilian Economics Meeting] f36, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
  • Handle: RePEc:anp:en2003:f36
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    File URL: http://www.anpec.org.br/encontro2003/artigos/F36.pdf
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    References listed on IDEAS

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    1. Jorgen W. Weibull, 1997. "Evolutionary Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262731215, April.
    2. Carrington, William J & Detragiache, Enrica & Vishwanath, Tara, 1996. "Migration with Endogenous Moving Costs," American Economic Review, American Economic Association, vol. 86(4), pages 909-930, September.
    3. Harris, John R & Todaro, Michael P, 1970. "Migration, Unemployment & Development: A Two-Sector Analysis," American Economic Review, American Economic Association, vol. 60(1), pages 126-142, March.
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    Cited by:

    1. Dehai Liu & Hongyi Li & Weiguo Wang & Chuang Zhou, 2015. "Scenario forecast model of long term trends in rural labor transfer based on evolutionary games," Journal of Evolutionary Economics, Springer, vol. 25(3), pages 649-670, July.

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    More about this item

    JEL classification:

    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games

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