We consider a signaling model where the senderʼs continuation value after signaling depends on his type, for instance because the receiver is able to update his posterior belief. As a leading example, we introduce Bayesian learning in a variety of environments ranging from simple two-period to...

We introduce search unemployment into Melitz's trade model. Firms' monopoly power on product markets leads to strategic wage bargaining. Solving for the symmetric equilibrium we show that the selection effect of trade influences labor market outcomes. Trade liberalization lowers unemployment and...