Theoretical Economics 19 (2024), 1001–1026

I study a persuasion game between a privately informed agent and a decision maker (DM) who can imperfectly verify the statements made by the agent by observing a signal that is correlated with the agent's information. I find that whether or not the DM benefits from communicating with the agent depends on whether the DM's signal and the agent's private information satisfy a weak affiliation condition. I then discuss the significance of this result to the debate over the use of self-appraisals in business. I argue that, in general, self-appraisals are only useful when the workers' abilities are multidimensional.

Keywords: Communication, verification, self-appraisals, mechanism design

JEL classification: C72, D82