Team Dynamics and the Empirical Structure of U.S. Firms

A model in which purposive agents self-organize into teams is demonstrated to
closely reproduce empirical data on the population of U.S. firms. There are
increasing returns within teams and agents move between teams or start new teams
when it is in their self-interest. Nash equilibria of the team formation game exist but
are unstable. Dynamics are studied using agent-based computing at full-scale with
the U.S. private sector (120 million agents). There arise stationary distributions of
team sizes, growth rates, ages, output, productivity, income, and job tenure, growth
rates that decline with age, growth rate variance that falls with size and age, and
approximately constant returns to scale at the aggregate level. Job-to-job flows,
hiring, unemployment and other labor market phenomena occur for microeconomic
reasons, without resort to external shocks. The model quantitatively reproduces a
large number of important regularities associated with firms and labor markets.

Team Dynamics and the Empirical Structure of U.S. Firms

R. Axtell
Categories: Related Work