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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title Persistent bias in advice-giving
Organization Unit
  • Zhuoqiong (Charlie) Chen
  • Tobias Gesche
  • English
Institution University of Zurich
Series Name Working paper series / Department of Economics
Number 228
ISSN 1664-7041
Number of Pages 47
Date 2017
Abstract Text We show that a one-off incentive to bias advice has persistent effects. In an experiment, 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.
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Keywords Advice-giving, conflict of interest, self-signaling, self-deception, Persönlicher Rat, Risikobereitschaft, Selbsttäuschung, Interessenkonflikt, Experiment
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