Principal-agent interactions in which the agent can preemptively signal prosociality can achieve higher levels of trust and reciprocity if both parties care about social esteem (Boulu-Reshef and Kuechle, 2023). However, it is unclear to what extent social esteem is necessary for this outcome. In...

Entrepreneurs may differentiate their ventures and attract investments by advertising that their firm produces positive externalities for society. Such signaling of entrepreneurs' trustworthiness may be a prevalent practice in these “impact investment'' opportunities. This paper investigates...