foresight about the outcome of wage bargaining. Instead workers use a recursive OLS learning mechanism and base their forecasts …This paper develops a search and matching model with heterogeneous firms, on-the-job search by workers, Nash bargaining … over wages and adaptive learning. We assume that workers are boundedly rational in the sense that they do not have perfect …

initial uncertainty in the external market but the possibility of subsequent learning about match-specific productivity, we …

incentives via short-term contracts become harder to provide as the agent's quality is revealed over time. …

We study relational contracts in a firm-worker relationship with mutual uncertainty about match quality. The worker … private information, uncertainty about match quality creates a holdup problem causing inefficiencies in relational contracts … even in the frequent action limit. We characterize the optimal relational contracts and show that they involve actions that …