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...

We analyze a two-player game of strategic experimentation with two-armed bandits. Either player has to decide in continuous time whether to use a safe arm with a known payoff or a risky arm whose expected payoff per unit of time is initially unknown. This payoff can be high or low, and is...

We introduce learning in a dynamic game of international pollution, with ecological uncertainty. We characterize and compare the feedback non-cooperative emissions strategies of players when the players do not know the distribution of ecological uncertainty but they gain information (learn)...

We analyse strategic experimentation in which information arrives through fully revealing, publicly observable “breakdowns.” With hidden actions, there exists a unique equilibrium that involves randomization over stopping times. This randomization induces belief disagreement on the...

This paper studies how agents with conflicting interests learn to cooperate when the details of cooperation are not common knowledge. It considers a repeated game in which one player has incomplete information about when and how her partner can provide benefits. Initially, monitoring is...

Overconfidence has been extensively documented in psychology and economics. This paper studies the long-term interaction between two overconfident agents who learn about common payoff-relevant fundamentals, such as the quality of a joint project or their working environment, and choose how much...

A patient seller faces a sequence of buyers and decides whether to build a reputation for supplying high quality products. Each buyer does not have access to the seller's complete records, but can observe all previous buyers' actions, and some informative private signal about the seller's...

The payoff matrix of a finite stage game is realized randomly, and then the stage game is repeated infinitely. The distribution over states of the world (a state corresponds to a payoff matrix) is commonly known, but players do not observe nature’s choice. Over time, they can learn the state...

We experimentally implement a dynamic public-good problem, where the public good in question is the dynamically evolving information about agents' common state of the world. Subjects' behavior is consistent with free-riding because of strategic concerns. We also find that subjects adopt more...

The paper analyzes a dynamic model of rational strategic learning in a network. It complements existing literature by providing a detailed picture of short-run dynamics in a game of strategic experimentation where agents are located in a social network. We show that the delay in information...