"A new and robust subgame perfect equilibrium in a model of triadic power relations."
This note presents a new subgame perfect equilibrium in an infinitely repeated game, which has Basu's triadic model as the stage game (Oxford Econ. Pap., 38 (1986) 259). The payoff for the laborer is the same as in Basu's model. The equilibrium is more robust than the Naqvi and Wemhöner's solution (J. Dev. Econ. 47 (1995) 191), in the sense that the equilibrium does not require the same high degree of rationality; simple well-known strategies are applied, and both the landlord and the merchant are better off than in the stage game. In the equilibrium outcome, the merchant receives a share of the extra profit from the extortionary labor contract.
Understanding Inequality Within Households
Ingvild Almås, Charlotte Ringdal and Ingrid Hoem Sjursen
Handbook of Labor, Human Resources and Population Economics
Depression and labor supply: Evidence from the Netherlands
Charlotte Ringdal, Frank Rootjes
Journal of Economics and Human Biology