CORRAL: Colloquium on Research Results Advancing Leadership
The CORRAL speaker series provides an opportunity for scholars to share and learn about cutting edge research related to the topic of leadership, broadly defined. You are invited to the fourth installment of CORRAL, with Cornell's Assistant Professor of Management and Organizations Sunita Sah on Thursday, March 29 at 4:00 p.m. An RSVP is necessary to attend and refreshments will be served.
"Clients First! Dealing with Conflicts of Interest in Medical and Financial Advising" with Dr. Sunita Sah
Conflicts of interest create an incentive for advisors to give biased advice, and disclosure is a popular remedy. Prior research, however, suggests that advisors who disclose their conflicts give more biased advice than those who do not. Across a series of studies, using monetary incentives to create real conflicts of interest, I show that disclosure can significantly decrease bias in advice as well as increase it. Whether disclosure increases or decreases bias depends on the professional norms of the context in which the advice is provided and whether the advisors are experts or non-experts. In general, disclosure prompts advisors to think deeper about the dilemma to give biased advice and consider whether the professional norms are to place their clients, or profits, first. For non-experts (research participants asked to play the role of advisors), disclosure tends to increase bias in settings in which self-interested advice is deemed to be the norm (e.g., giving financial advice) and decrease bias in settings in which placing advisees first is deemed to be the norm (e.g., giving medical advice). However, for experts (actual practicing financial and medical advisors), who often have professional norms that emphasize placing advisees’ interests first, disclosure can have the beneficial effect of decreasing bias in advice because it increases the salience of this norm. These findings advance previous assumptions regarding conflict of interest disclosures by highlighting the importance of professional norms when examining the potential and pitfalls of disclosure.
More about Dr. Sunita Sah