Disclosures About Disclosures: Can Conflict of Interest Warnings Be Made More Effective?

16 Pages Posted: 30 Apr 2015

See all articles by Ahmed E. Taha

Ahmed E. Taha

Pepperdine University - Rick J. Caruso School of Law

John V. Petrocelli

Wake Forest University

Multiple version iconThere are 2 versions of this paper

Date Written: June 2015

Abstract

People regularly rely on advisors who have conflicts of interest. The law often requires advisors to disclose these conflicts. Despite these disclosures, people generally insufficiently discount conflicted advice. This might be partly due to people interpreting the very fact that the advisor is disclosing a conflict of interest as a sign that the advisor is trustworthy, undermining the purpose and effectiveness of the disclosure. This article presents the results of an experiment indicating that requiring advisors to also disclose that they are legally required to disclose their conflict of interest makes people discount their advice more. This occurs, at least in part, because such advisors are viewed as less trustworthy than advisors who merely disclose their conflict of interest without also stating that the disclosure is legally required.

Suggested Citation

Taha, Ahmed E. and Petrocelli, John V., Disclosures About Disclosures: Can Conflict of Interest Warnings Be Made More Effective? (June 2015). Journal of Empirical Legal Studies, Vol. 12, Issue 2, pp. 236-251, 2015, Available at SSRN: https://ssrn.com/abstract=2600722 or http://dx.doi.org/10.1111/jels.12071

Ahmed E. Taha (Contact Author)

Pepperdine University - Rick J. Caruso School of Law ( email )

24255 Pacific Coast Highway
Malibu, CA 90263
United States

John V. Petrocelli

Wake Forest University ( email )

2601 Wake Forest Road
Winston-Salem, NC 27109
United States

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