We study optimal contracting in a setting where a firm repeatedly interacts with multiple workers, and can compensate them based on publicly available performance signals as well as privately reported peer evaluations. If the evaluation and the effort provision are done by different workers (as...

We highlight a novel trade-off with the use of break-up fees in employment contracts in the presence of firm-specific matching gains and asymmetric learning about workers' quality. If the market infers the workers' quality from job-assignments (or, "promotions"), it leads to inefficiently few...