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Title:Transparency and Disclosing Conflicts of Interest: An Experimental Investigation PDF Logo
Authors:Inderst, Roman
Rajko, Alexander
Ockenfels, Axel
Issue Date:2010
Series/Report no.:Beiträge zur Jahrestagung des Vereins für Socialpolitik 2010: Ökonomie der Familie - Session: Game Theory and Applications B13-V1
Abstract:Conflicts of interest have always been a problem in situation of advice giving between a client and a better informed advisor. Economic theory captures this matter by means of principal-agent models or games of information transmission. We experimentally investigate how different degrees of transparency about a conflict of interest influences individual decision making in a game of strategic information transmission. Even though transparency has significant effects, these are not all predicted by standard economic theory. For example, advisors are subject to an "over-communication effect". Similarly, when knowing about the deception, clients still do not sufficiently discount the biased information they receive. In conclusion, increasing transparency is not necessarily a good policy advice.
Subjects:Disclosure
Conflict of Interest
Experiment
Principal-Agent
Information Transmission
Transparency
JEL:D82
D01
C91
Document Type:Conference Paper
Appears in Collections:Jahrestagung des Vereins für Socialpolitik 2010 (Kiel): Ökonomie der Familie

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