A new and robust subgame perfect equilibrium in a model of triadic power relations
We present a new subgame perfect equilibrium in an infinitely repeated game, which has Basu's triadic model as the stage game. The payoff for the laborer is the same as in Basu's model. The equilibrium is more robust than the solution in Naqvi and Wemhoner in the sense that the equilibrium does not require the same high degree of rationality; simple well-known strategies are applied, and both the lanklord and the merchant are better of than in the stage game.
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References listed on IDEAS
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- Basu, Kaushik, 1988.
"Strategic irrationality in extensive games,"
Mathematical Social Sciences,
Elsevier, vol. 15(3), pages 247-260, June.
- Kaushik Basu, 2010. "Strategic Irrationality in Extensive Games," Levine's Working Paper Archive 375, David K. Levine.
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- Naqvi, Nadeem & Wemhoner, Frederick, 1995. "Power, coercion, and the games landlords play," Journal of Development Economics, Elsevier, vol. 47(2), pages 191-205, August. Full references (including those not matched with items on IDEAS)