Dynamic contracting with limited commitment and the ratchet effect
研究企业与工人在无限期动态博弈中，因企业无法长期承诺而导致的棘轮效应，发现当双方耐心足够时，均衡结果取决于工人高生产率的先验概率：低时企业提供混同契约，高时企业解雇低生产率工人。
We study dynamic contracting with adverse selection and limited commitment. A firm (the principal) and a worker (the agent) interact for potentially infinitely many periods. The worker is privately informed about his productivity and the firm can only commit to short‐term contracts. The ratchet effect is in place since the firm has the incentive to change the terms of trade and offer more demanding contracts when it learns that the worker is highly productive. As the parties become arbitrarily patient, the equilibrium outcome takes one of two forms. If the prior probability of the worker being productive is low, the firm offers a pooling contract and no information is ever revealed. In contrast, if this prior probability is high, the firm fires the unproductive worker at the beginning of the relationship.