Persistent bias in advice-giving

Arbeitspapier

We show that a one-off incentive to bias advice has persistent effects. In an experiment, some advisers were paid a bonus to recommend a lottery which only risk-seeking individuals should choose to a less informed client. Afterwards, they had to choose for themselves and make a second recommendation to another client, without any bonus. These advisers choose the risky lottery and recommend it a second time up to six times more often than advisers in a control group who were never offered a bonus. These results are consistent with a theory we present which is based on advisers' image concerns of appearing incorruptible.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 228

Classification and Topics

• Classification: Wirtschaft ; Design of Experiments: Laboratory, Individual ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness ; Portfolio Choice; Investment Decisions
• Subject: advice-giving ; conflict of interest ; self-signaling ; self-deception

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Chen, Zhuoqiong ; Gesche, Tobias
• Event: Veröffentlichung
• (who): University of Zurich, Department of Economics
• (where): Zurich
• (when): 2017

Further information

• DOI: doi:10.5167/uzh-124325
• Handle: http://hdl.handle.net/10419/173410
• Last update: 10.03.2025, 11:43 AM CET