Lyapunov stability in an evolutionary game theory model of the labour market

Abstract

In this paper the existence and stability of equilibriums in an evolutionary game theory model of the labour market is studied by using the Lyapunov method. The model displays multiple equilibriums and it is shown that the Nash equilibriums of the static game are evolutionary stable equilibrium in the game theory evolutionary set up. A complete characterization of the dynamics of an evolutionary model of the labour market is provided.

Keywords

• Evolutionary game theory approach
• Labour market
• Informal economy
• Lyapunov function