Daylian M. Cain

The unintended consequences of conflict of interest disclosure.

CONFLICTS OF INTEREST, BOTH FINANCIAL AND NONfinancial, are ubiquitous in medicine, and the most commonly prescribed remedy is disclosure. The Medicare Payment Advisory Commission and the Accountable Care Act impose a range of disclosure requirements for physicians, and almost all medical journals now require authors to disclose conflicts of interest (although these requirements may be imperfectly heeded). Given that some relationships between physicians and industry are fruitful and some conflicts are unavoidable, can disclosure correct the problems that arise when economic interests prevent physicians from putting patients’ interests first? Disclosure has appeal across the political spectrum because it acknowledges the problem of conflicts but involves minimal regulation and is less expensive to implement than more comprehensive remedies. More importantly, even if disclosure is rarely seen as providing a complete solution to the problem, it is broadly perceived to have beneficial effects. There are, however, reasons that disclosure can have adverse effects, exacerbating bias and hurting those it is ostensibly intended to help.

Everyone's a Little Bit Biased (Even Physicians)

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When Sunlight Fails to Disinfect: Understanding the Perverse Effects of Disclosing Conflicts of Interest

Disclosure is often proposed as a remedy for conflicts of interest, but it can backfire, hurting those whom it is intended to protect. Building on our prior research, we introduce a conceptual model of disclosure’s effects on advisors and advice recipients that helps to explain when and why it backfires. Studies 1 and 2 examine psychological mechanisms (strategic exaggeration, moral licensing) by which disclosure can lead advisors to give more-biased advice. Study 3 shows that disclosure backfires when advice recipients who receive disclosure fail to sufficiently discount and thus fail to mitigate the adverse effects of disclosure on advisor bias. Study 4 identifies one remedy for inadequate discounting of biased advice: explicitly and simultaneously contrasting biased advice with unbiased advice.

Tainted Altruism When Doing Some Good Is Evaluated as Worse Than Doing No Good at All

In four experiments, we found that the presence of self-interest in the charitable domain was seen as tainting: People evaluated efforts that realized both charitable and personal benefits as worse than analogous behaviors that produced no charitable benefit. This tainted-altruism effect was observed in a variety of contexts and extended to both moral evaluations of other agents and participants’ own behavioral intentions (e.g., reported willingness to hire someone or purchase a company’s products). This effect did not seem to be driven by expectations that profits would be realized at the direct cost of charitable benefits, or the explicit use of charity as a means to an end. Rather, we found that it was related to the accessibility of different counterfactuals: When someone was charitable for self-interested reasons, people considered his or her behavior in the absence of self-interest, ultimately concluding that the person did not behave as altruistically as he or she could have. However, when someone was only selfish, people did not spontaneously consider whether the person could have been more altruistic.

Giving Versus Giving In

AbstractAltruism is central to organizational and social life, but its motivations are not well understood. We propose a new theoretical distinction that sorts these motivations into two basic type...

Behavioural Public Policy: Confessing one’s sins but still committing them: transparency and the failure of disclosure

If financial advisers disclose the fact that they get a bonus if their clients invest in a particular product, how will clients use that information, and to what extent will the disclosure help them make a better decision? If at all, how might the disclosure alter the advice given by advisers, or how might it affect the relationship between advisers and their clients? In this chapter, we address these questions. Reviewing extensive evidence that casts doubt on the efficacy of disclosure, we conclude that disclosure is not a panacea; it often fails to serve its intended functions and may sometimes backfire, hurting the interests of those it was intended to protect. Conflicts of interest, in which professionals have personal interests that conflict with their professional responsibilities, have been at the heart of many recent business fiascos. For example, the bubble in the American real estate market that burst in 2008 was partly supported by inflated ratings of collateralized mortgage bonds that were created by rating agencies that had financial ties to the issuers of those bonds. Many recent accounting scandals can be traced to conflicts of interest on the part of auditors, who received large consulting fees from the same firms they audited. Likewise, many health care professionals worry that similar problems have been created in medicine because of industry payments to physicians and fee-for-service compensation arrangements.

Do the Ends Justify the Means? The Relative Focus on Overhead Versus Outcomes in Charitable Fundraising

Prospective donors are often sensitive to the amount of overhead in charitable fundraising. The present studies examine how differences in one’s personal commitment to a cause moderate the relative focus on overhead versus outcomes in charitable fundraising. Three experiments find that donors who are more committed to the cause are, in fact, accepting of higher levels of overhead. Experiment 1 demonstrates that people are willing to accept a higher level of overhead for causes that are more (vs. less) important to them. Experiment 2 provides process evidence by showing that perceptions of cause importance generally influence how people evaluate the intentions behind charitable fundraising versus its outcomes. Experiment 3 directly manipulates cause importance and demonstrates a downstream effect on actual donations. Together, these studies suggest a more general framework whereby differences in personal commitment change the relative focus on the intentions behind pro-social behavior versus the outcomes achieved.

Doing Good or Looking Good? Distinguishing Between Private and Public Prosociality

Prosociality is central to social and organizational life. The papers in this symposium explore the various ways in which public versus private settings for a prosocial behavior can differentially ...