We study a large market with directed search and signaling. Each seller chooses an investment that determines the quality of the good which is the seller's private information. A seller also chooses the price of the good and the number of selling sites. After observing sellers' choices of prices...

We study the impact of reputational incentives in markets characterized by moral hazard problems. Social preferences have been shown to enhance contract enforcement in these markets, while at the same time generating considerable wage and price rigidity. Reputation powerfully amplifies the...

Reciprocity is intuitively essential to almost every relationship, and many experimental studies indicate that people are driven by it. In this paper, we propose a theory that a party's ex post performance is only partially dependent on whether the outcome satisfies his entitlement, and develop...