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To Switch or not to Switch? A Dilemma in Workplace when Game Theory is Applied

What kind of scenario would you come up with when someone says “Game Theory”? The most common examples would be the classic “Prisoner’s dilemma”, or events with great impact like choosing political allies. However, the concept and application of Game Theory is  more common in our lives than we have realized. Its appearance exists in our common life in various ways, such as deciding whether to switch job or not.

A blog from Washington Post “You could be Leaving Money on the Table by not Switching Jobs” referenced in the link below basically discusses the factors affecting people’s decision to switch jobs and the frequency to do so. It is reasonable to relate the scenario with Game Theory that we’ve been mentioning above. The person in the struggle of deciding whether to change his or her occupation can be considered as one of the two or more players. On the other hand, firms or simply the employers can be seen as another player in the job matching game. The blog states that sticking to a job that does not fit one can negatively influence his or her overall income, in the sense of both short-term and long-term. However, changing one’s position in the field or market can be very challenging since s/he has to jump out of the comfort zone and risk losing the stable income s/he can already earned. Thus, for the strategy of switching the job willingly, payoffs is potentially earning more corresponding to his or her ability. For another strategy which is staying in the job that does not match one’s ability or expectation, payoffs would be not facing the risk of losing the current income and staying in the comfort zone.

Moreover, from what we learnt from the real life, reality is always more complicated than the context in our textbook. The factors that influence one deciding on switching job change the extent of payoffs, thus changing one’s best response (defined as “the strategy which produces the most favorable outcome for the player.” ( As described in the blog referenced, players (people struggling to switch jobs in this case) tend to stick to their current status in occupation during the Great Recession, despite the fact that they were suffering a lot from the job. Such phenomenon can be explained by the impact of the economic deterioration. More specifically, the recession enlarges the payoff of clinging to the current job and shields the benefit of the strategy in which s/he leaves the unsatisfactory job and finds a new one. For employers who play as the role of player two here, economic recession makes them prone to reduce the staff. Hence, knowing that the firms would choose the strategy of rejecting a new staff, player 1 would be more willing to not risk losing having a job while economy was going downhill so quickly.

To switch or not to switch? A dilemma in job switching is clearly a scenario in which people apply Game Theory in common life to make decision when they might not have even realized.




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September 2015