A Model of Long-Term Contracts

Staff Report 47 | Published January 1, 1980

Author

John Bryant

A Model of Long-Term Contracts

Abstract

Long-term contracts are explained as equilibrium strategies of supergames. In the specific coherent general equilibrium model provided, limited mobility of labor, in the form of a fixed cost of moving, generates long-term contracts.

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DOI: https://doi.org/10.21034/sr.47

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