explain her evaluation to the agent if and only if the evaluation turns out to be bad. The justification guarantees the agent …Should principals explain and justify their evaluations? In this paper the principal's evaluation is private … that the principal has not distorted the evaluation downwards. On the equilibrium path, as long as the principal provides a …

evaluation indicates bad performance. The justification assures the agent that the principal has not distorted the evaluation …Should principals explain and justify their evaluations? Suppose the principal's evaluation is private information, but … she can provide justification by sending a costly cheap-talk message. If she does not provide justification, her message …

employee\'s performance was poor. The justification assures the employee that the manager has not distorted the evaluation …? Suppose a manager\'s evaluation is private information. Justifying her evaluation is costly but limits the principal\'s scope … for distorting her evaluation of the employee. I show that the manager justifies her evaluation if and only if the …

. Furthermore, since some workers do not reciprocate the principal's altruism, the principal may find it optimal to write a contract … that simultaneously signals his altruism and screens reciprocal worker types. Such a contract is characterised by …

that the principal cares for them. Principals can signal their altruism by offering a generous contract, consisting of a … agents do not reciprocate the principal's altruism, the principal may find it optimal to write a contract that simultaneously … signals his altruism and screens reciprocal worker types. I show that such a contract is characterised by excessively strong …

optimal deterministic contract for almost any degree of loss aversion. The optimal stochastic contract pays a high wage …

choice is more accurate than a noisy public performance measure. For some contingencies the optimal contract has to specify … the loss from termination is small. Under an optimal contract the agent's wage may depend only on the principal's report … and not on the public signal. Nonetheless, public information is valuable as it facilitates truthful subjective evaluation …

choice is more accurate than a noisy public performance measure. For some contingencies the optimal contract has to specify … the loss from termination is small. Under an optimal contract the agent's wage may depend only on the principal's report … and not on the public signal. Nonetheless, public information is valuable as it facilitates truthful subjective evaluation …