In the social learning model of Banerjee [1] and Bikhchandani, Hirshleifer and Welch [2] individuals take actions sequentially after observing the history of actions taken by the predecessors and an informative private signal. If the state of the world is changing stochastically over time during...

We discuss a competitive (labor) market where firms face capacity constraints and individuals differ according to their productivity. Firms offer two-dimensional contracts like wage and task level. Then workers choose firms and contracts. Workers might be rationed if the number of applicants...

This paper considers bargaining with one-sided private information and alternating offers where an agreement specifies both a transfer and an additional (sorting) variable. Moreover, both sides can propose menus. We show that for a subset of parameters the alternating-offer game has a unique...

This paper considers a dynamic version of Akerlof's (1970) lemons problem where buyers and sellers must engage in search to find a trading partner. We show that if goods are durable, the market itself may provide a natural sorting mechanism. In equilibrium, high-quality goods sell at a higher...