As demonstrated in a recent laboratory experiment (see Sebald & Walzl, 2014), individuals tend to sanction others who subjectively evaluate their performance whenever this assessment falls short of the individuals’ self-evaluation. Interestingly, this is the case even if the individuals’...

s demonstrated in a recent laboratory experiment [see Sebald and Walzl (2014)], individuals tend to sanction others who subjectively evaluate their performance when-ever this assessment falls short of the individuals' self-evaluation. Interestingly, this is the case even if the individuals'...

We show that individuals’ desire to protect their self-esteem against ego-threatening feedback can mitigate moral hazard in environments with purely subjective performance evaluations. In line with evidence from social psychology we assume that agents’ react aggressively to evaluations by...