Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/173410 
Year of Publication: 
2017
Series/Report no.: 
Working Paper No. 228
Version Description: 
Revised version
Publisher: 
University of Zurich, Department of Economics, Zurich
Abstract: 
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.
Subjects: 
advice-giving
conflict of interest
self-signaling
self-deception
JEL: 
C91
D03
D83
G11
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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