committed to it. The principal may offer a menu of contracts to screen ethics. Both honest and dishonest agents are willing to … misrepresent their ethics. The principal and dishonest agents benefit from an increased likelihood of honesty as long as honesty is … likely enough. Honest agents always profit from ethics uncertainty if a good match is likely. This is also true if dishonesty …

lie about their ethics); the principal is able to screen between good and bad circumstances. In contrast, if honest … behavior is conditional on the contract being fair, the principal cannot screen along the ethics dimension. If the probability …