Disclosing decision makers’ private interests

B-Tier
Journal: European Economic Review
Year: 2022
Volume: 150
Issue: C

Score contribution per author:

2.018 = (α=2.02 / 1 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

I study whether a decision maker would make better decisions if his private interests were disclosed. I focus on a delegation relationship in which a decision maker attempts to build a good reputation. I compare the following two scenarios: a non-disclosure case in which the interest of the decision maker is private information and a disclosure case in which his interest is publicly known. I show that the disclosure of the private interests of the decision maker can only improve the decision made when reputation concerns are intermediate, and decision makers are sufficiently informed and public-spirited. Otherwise, disclosure can be detrimental because it induces decision makers to make decisions against their private interests too often. My framework provides a novel cautionary tale regarding the use of disclosure laws to address conflicts of interest.

Technical Details

RePEc Handle
repec:eee:eecrev:v:150:y:2022:i:c:s0014292122001702
Journal Field
General
Author Count
1
Added to Database
2026-01-25