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A New and Robust Subgame Perfect Equilibrium in a Model of Triadic Power Relations

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  • Hatlebakk, M.

Abstract

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.

Suggested Citation

  • Hatlebakk, M., 2000. "A New and Robust Subgame Perfect Equilibrium in a Model of Triadic Power Relations," Norway; Department of Economics, University of Bergen 2400, Department of Economics, University of Bergen.
  • Handle: RePEc:fth:bereco:2400
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    References listed on IDEAS

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    1. James W. Friedman, 1971. "A Non-cooperative Equilibrium for Supergames," Review of Economic Studies, Oxford University Press, vol. 38(1), pages 1-12.
    2. Abreu, Dilip, 1988. "On the Theory of Infinitely Repeated Games with Discounting," Econometrica, Econometric Society, vol. 56(2), pages 383-396, March.
    3. Basu, Kaushik, 1988. "Strategic irrationality in extensive games," Mathematical Social Sciences, Elsevier, vol. 15(3), pages 247-260, June.
    4. Basu, Kaushik, 1986. "One Kind of Power," Oxford Economic Papers, Oxford University Press, vol. 38(2), pages 259-282, July.
    5. Naqvi, Nadeem & Wemhoner, Frederick, 1995. "Power, coercion, and the games landlords play," Journal of Development Economics, Elsevier, vol. 47(2), pages 191-205, August.
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    Cited by:

    1. Hatlebakk, Magnus, 2002. "Triadic Power Relations with Production, External Markets and Multiple Agents," Working Papers 02-18, Cornell University, Center for Analytic Economics.
    2. Baran Han, 2018. "The role and welfare rationale of secondary sanctions: A theory and a case study of the US sanctions targeting Iran," Conflict Management and Peace Science, Peace Science Society (International), vol. 35(5), pages 474-502, September.
    3. Espen Villanger, 2006. "Is Bonded Labor Voluntary? Evidence from the Liberation of the Kamaiyas in the Far-Western Region of Nepal," CMI Working Papers 16, CMI (Chr. Michelsen Institute), Bergen, Norway.
    4. Basu , Kaushik & Stiglitz, Joseph E., 2013. "International lending, sovereign debt and joint liability : an economic theory model for amending the treaty of Lisbon," Policy Research Working Paper Series 6555, The World Bank.
    5. Mansuri, Ghazala, 2007. "Credit layering in informal financial markets," Journal of Development Economics, Elsevier, vol. 84(2), pages 715-730, November.
    6. Espen Villanger, 2006. "Is bonded labor voluntary? A framework against forced work," CMI Working Papers WP 2006: 7, CMI (Chr. Michelsen Institute), Bergen, Norway.
    7. Basu, Kaushik, 2014. "Fiscal policy as an instrument of investment and growth," Policy Research Working Paper Series 6850, The World Bank.
    8. Shami, Mahvish, 2012. "The Impact of Connectivity on Market Interlinkages: Evidence from Rural Punjab," World Development, Elsevier, vol. 40(5), pages 999-1012.
    9. Magnus Hatlebakk, 2006. "The effects of agrarian contracts of a governmental intervention into bonded labor in the western terai of Nepal," CMI Working Papers WP 2006: 6, CMI (Chr. Michelsen Institute), Bergen, Norway.
    10. Espen Villanger, 2003. "Company influence on foreign aid disbursement: Is conditionality credible when donors have mixed motives?," CMI Working Papers WP 2003:4, CMI (Chr. Michelsen Institute), Bergen, Norway.
    11. Kaushik Basu, 2016. "Beyond the Invisible Hand: Groundwork for a New Economics," Economics Books, Princeton University Press, edition 1, number 9299, April.

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    More about this item

    Keywords

    GAMES ; LABOUR ; POWER GENERATION;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets

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