I study a repeated principal-agent game with long‐term output contracts that can be renegotiated at will. Actions are observable but not contractible, so they can only be incentivized through implicit agreements formed in equilibrium. I show that contract renegotiation is a powerful tool for...

We study relational contracts in a firm-worker relationship with mutual uncertainty about match quality. The worker's actions are publicly observed and generate output, and hence information about the match quality. Despite the absence of private information, uncertainty about match quality...