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On the Effectiveness of the Lifetime–Employment–Contract Policy
Author(s) -
Ohnishi Kazuhiro
Publication year - 2002
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/1467-9957.00326
Subject(s) - subgame perfect equilibrium , economics , microeconomics , nash equilibrium
This paper examines a subgame perfect equilibrium when one of two duopolists executes a lifetime–employment–contract policy, which is a strategic commitment that generates kinks in the reaction curve, by using a two–stage quantity–setting model. The purpose of the paper is to show concretely in what kinds of cases the policy is effective.