Conflicts of interest can lead experts to give biased and corrupt advice. Although disclosure is often proposed as a potential solution to these problems, we show that it can have perverse effects. First, people generally do not discount advice from biased advisors as much as they should, even when advisors’ conflicts of interest are disclosed. Second, disclosure can increase the bias in advice because it leads advisors to feel morally licensed and strategically encouraged to exaggerate their advice even further. As (...) a result, disclosure may fail to solve the problems created by conflicts of interest and may sometimes even make matters worse. (shrink)

Conflicts of interest can lead experts to give biased and corrupt advice. Although disclosure is often proposed as a potential solution to these problems, we show that it can have perverse effects. First, people generally do not discount advice from biased advisors as much as they should, even when advisors’ conflicts of interest are disclosed. Second, disclosure can increase the bias in advice because it leads advisors to feel morally licensed and strategically encouraged to exaggerate their advice even further. As (...) a result, disclosure may fail to solve the problems created by conflicts of interest and may sometimes even make matters worse. (shrink)

This collection explores the subject of conflicts of interest. It investigates how to manage conflicts of interest, how they can affect well-meaning professionals, and how they can limit the effectiveness of corporate boards, undermine professional ethics, and corrupt expert opinion. Legal and policy responses are considered, some of which (e.g., disclosure) are shown to backfire and even fail. The results offer a sobering prognosis for professional ethics and for anyone who relies on professionals who have conflicts of interest. The contributors (...) are leading authorities on the subject in the fields of law, medicine, management, public policy, and psychology. The nuances of the problems posedby conflicts of interest will be highlighted for readers in an effort to demonstrate the manyways that structuring incentives can affect decision making and organizations' financial well-being. (shrink)