Quantity-setting games with lifetime employment contracts as a strategic commitment

This paper considers lifetime employment contracts asa strategic commitment and examines the respectiveequilibrium outcomes of the two cases of a quantity-setting duopoly game with substitute goods and a quantity-setting duopoly game with complementary goods. First, in the quantity-setting game with substitute goods, we ?nd that there is an equilibrium in which both the firms adopt lifetime employment. Next, in the quantity-setting game withcomplementary goods, we ?nd that there is an equilibrium in which at least one ?rm adopts lifetime employment, and that lifetime employment is bene?cial for both ?rms.