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.
Resettlement capacity assessments for climate induced displacements: Evidence from Ethiopia
Solomon Zena Walelign, Susan L. Cutter and Päivi Lujala
Customers play an important role in shaping firms’ VAT compliance
Odd-Helge Fjeldstad, Cecilia Kagoma, Ephraim Mdee, Ingrid Hoem Sjursen & Vincent Somville
Household Bargaining and Spending on Children: Experimental Evidence from Tanzania
Charlotte Ringdal and Ingrid Hoem Sjursen