We analyze a large, anonymous labour market in which firms motivate their workers via relational contracts. The market is frictionless and features on-the-job search, in that all acceptable vacancies are immediately filled and the employed compete with the unemployed for vacancies. While firms...

This paper analyses a model of R&D where the product quality is imperfectly observed by customers. We consider different types of customer monitoring and characterise the equilibrium levels of investment and the resulting reputational dynamics.

If the firm does not know its own quality, we show that the firm stops investing when its reputation gets close to the exit threshold and its life-expectancy vanishes. If the firm knows its own quality, to the contrary, we show that the firm optimally invests until its reputation falls to the...

A buyer wishes to purchase a good from a seller who chooses a sequence of prices over time. Each period the buyer can also exercise an outside option, abandoning their search or moving on to another seller. We show there is a unique equilibrium in which the seller charges a constant price in...

This paper solves for the profit-maximizing strategy of a durable-goods monopolist when incoming demand varies over time. We first characterize the consumers' optimal purchasing decision by a cut-off rule. We then show that, under a monotonicity condition, the profit-maximizing cut-offs can be...

This paper investigates auctions where bidders have limited liability. First, we analyze bidding behavior under different auction formats, showing that the second-price auction induces higher prices, higher bankruptcy rates, and lower utilities than the first-price auction. Second, we show that...

We consider a seller who wishes to sell K goods by time T. Potential buyers enter IID over time and are forward-looking, so can strategically time their purchases. At any point in time, profit is maximized by awarding the good to the agent with the highest valuation exceeding a cutoff. These...