The authors modify the standard principal-agent model with oral hazard by allowing the contract to be renegotiated after the agent's choice of action and before the observation of the action's consequences. In equilibrium, the agent randomizes over effort levels. The optimal contract gives the...

This article studies the implications of learning-by-doing for market conduct and performance. We use a general continuous-time model to show that output increases over time in the absence of strategic interactions, and that a monopolist learns too slowly, compared with the social optimum. We...

Firms sometimes try to "poach" the customers of their competitors by offering them inducements to switch. We analyze duopoly poaching under both short-term and long-term contracts assuming either that each consumer's brand preferences are fixed over time or that preferences are independent over...