We study a dynamic model of monopolistic provision of commitment devices to sophisticated, Strotzian decision makers …. We allow for unobservable heterogeneity at the contracting stage in the agents' preferences for commitment vs … of the induced balance between commitment and flexibility. …

In Spence's (1973) signaling by education model and in many of its extensions, firms can only infer workers …' productivities. We characterize the trade-offs between signaling by workers and costly information acquisition by firms. Information … workers have low productivity. Our analysis applies also to other signaling problems, e.g. the financial structure of firms …

such signaling effects may arise in equilibrium and may lead to more unequal distributions of wealth and lower welfare than …

characterize the trade-offs between signaling by workers and costly auditing by firms. Auditing is always associated with (partial …