This paper studies how ex-ante information affects consumer welfare in a search market where buyers search and match to sellers of a vertically differentiated product. In a random search market, a buyer gets no informative signal about the quality of a seller's product prior to matching, whereas in a directed search market, a buyer observes a perfectly informative signal. I derive the unique equilibrium outcome in each type of market and show that consumers are worse off in a directed search market when sellers are scarce and prices are bilaterally ex-post efficient.

We consider sequential search by an agent who cannot observe the quality of goods but can acquire information by buying signals from a profit-maximizing principal with limited commitment power. The principal can charge higher prices for more informative signals in any period, but high prices in the future discourage continued search by the agent, thereby reducing the principal's future profits. A unique stationary equilibrium outcome exists, and we show that the principal (i) induces the socially efficient stopping rule, (ii) extracts the full surplus, and (iii) persuades the agent against settling for marginal goods, extending the duration of surplus extraction. However, introducing an additional, free source of information can lead to inefficiency in equilibrium.

I study a continuous time principal-agent model in which an unknown parameter and the agent's hidden effort affect the distribution of observable outcomes. The principal and the agent learn about the parameter by observing past outcomes. The agent's current effort has an implicit long-term effect through the belief dynamics and a deviation in effort creates a persistent disparity between the principal's and the agent's beliefs. This disparity affects the rate of learning as well as how the two evaluate the expected distribution of future outcomes which in turn affects their evaluation of future payoffs. Placing minimal restrictions on how effort and the parameter interact, I derive necessary and sufficient conditions for incentive compatible contracts. In addition to the agent's promised utility, the covariance between the on-path posterior beliefs and the agent's total payoff serves as a second state variable capturing the marginal long-run effects of effort.