Should principals explain and justify their evaluations? Suppose the principal's evaluation is private information, but … is restricted, but the message is costless. I show that the principal justies her evaluation to the agent if the … evaluation indicates bad performance. The justication assures the agent that the principal has not distorted the evaluation …

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 …

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 …

shock and a discretionary buyer transfer. In the absence of communication, we find that rigid contracts are more frequent … and lead to higher earnings for both buyer and seller. By contrast, in the presence of communication, flexible contracts … considerably more from flexible with communication than rigid without communication. Our results show quite strongly that …

shock and a discretionary buyer transfer. In the absence of communication, we find that rigid contracts are more frequent … and lead to higher earnings for both buyer and seller. By contrast, in the presence of communication, flexible contracts … considerably more from flexible with communication than rigid without communication. Our results show quite strongly that …

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 …