Networks, Property, and the Division of Labor

Abstract

We use a simulation-based method to consider the effect of different network structures on the propensity for economic producers to develop a complementary division of labor. We use a graph-coloring game, in which nodes are given incentives to find a color that does not match their nearest neighbors, to represent the interdependent coordination problems inherent to the division of labor. We find that a decentralized development of a division of labor is difficult, particularly when too many specializations are chosen. Counterintuitively, a division of labor is more likely to evolve when the ability of agents to specialize is more constrained. The ability to store property also facilitates the development of a division of labor.