I study the properties of optimal long-term contracts in an environment in which the agent.s type evolves stochastically over time. The model stylizes a buyer-seller relationship but the results apply quite naturally to many contractual situations including regulation and optimal...

We consider an infinitely repeated game in which a privately informed, long-lived manager raises funds from short-lived investors in order to finance a project. The manager can signal project quality to investors by making a (possibly costly) forward-looking disclosure about her project's...

We consider an infinitely repeated game in which a privately informed, long-lived manager raises funds from short-lived investors in order to finance a project. The manager can signal project quality to investors by making a (possibly costly) forward-looking disclosure about her project's...

This paper studies strategic behavior in product markets with asymmetric information. A real options model is developed to investigate information revelation and signaling role capital structure. Information revelation is ensured through a learning mechanism that stems from the real options...

Although many signaling situations are best interpreted as repeated games, prior research often models them as one-shot games. We analyze a class of repeated signaling games in which the informed player's type is persistent and the history of actions is perfectly observable. In this context a...

We consider repeated games with private monitoring that are 'close' to repeated games with public/perfect monitoring. A private monitoring information structure is close to a public monitoring information structure when private signals can generate approximately the same distribution of the...

This article analyzes the role of information in building reputation in an investment/trust game. The model allows for information asymmetry in a finitely repeated sender-receiver game and solves for sequential equilibrium to show that if there are some trustworthy managers who always disclose...

We study the profit-maximizing mechanism in bilateral trade with interdependent valuations. The seller privately observes the item's quality, while the buyer privately knows his type of valuation. The seller's valuation only depends on the quality, and the buyer's valuation depends on both the...