Socially concerned duopolies with lifetime employment as a strategic commitment

This paper considers a two-stage game model with a nonlinear concave demand function where two socially concerned firms compete with each other. In the first stage, each firm decides simultaneously and independently whether to offer lifetime employment as a strategic commitment device. In the second stage, after observing the rival’s choice in the first stage, each firm chooses simultaneously and independently an actual output level. Each socially concerned firm maximizes its own profit plus a fraction of consumer surplus. The paper discusses the equilibrium outcomes of the model