earticle

영어

This study examines an evolutionary path of two rival norms about pay strategies in Korea. This study specifically investigates the transition from K－norm to U－norm, K－norm represents seniority－based pay norms and U－norm represents the performance－based pay norms. The underlying theoretical rationale was based on the stag－hunt game(a typical coordination game), which accepts two Nash equilibria(both stag－hunting and hare－hunting). The stag－hunt game is just to say that it is best to hunt stag if the other player hunts stag, and it is best to hunt hare if the other player hunts hare. One is called as payoff dominant norm and the other is as risk dominant norm. This study also extended the stag－hunt game framework toward the "evolutionary game theory" to fully investigate the evolutionary path of pay strategies adoption by Korean firms. The 169 large firms were selected and analyzed. Simulations of evolutionary games exhibited the important role of imitation networks in diffusing the U－norms in Korean industry. The coexistence can be interpreted as the result of both firms' risk free propensity in dynamic environments and institutional path－dependence. The theoretical and practical implications are discussed.