Disclosure’s two-edged sword

Several prior posts reviewed the findings of various studies which raised questions about the efficacy of disclosure as a COI mitigant, including that:

– Disclosure can “morally license” the conflicted party to act in a COI-based way.

– Individuals impacted by the COI may not fully understand/be aware of what is being disclosed.

– A “reverse conflict of interest” could occur, meaning that an individual dealing with the conflicted party could overcompensate for it.

– “Disclosure can place inappropriate pressure on the audience to heed the advice — for example, in order to avoid insinuating that the [disclosing party’s] advice has been corrupted.”

A study recently authored by Sunita Sah of the Samuel Curtis Johnson Graduate School of Management of Cornell University; and Prashant Malaviya and Debora Thompson, both of the McDonough School of Business, Georgetown University  — “Conflict of Interest Disclosure as an Expertise Cue: Differential Effects Due to Automatic Versus Deliberative Processing,” which  was published in July in Organizational Behavior and Human Decision Processes — adds to this intriguing body of knowledge.

As described in a recent issue of the Cornell Chronicle, “the researchers examined two years of posts in 60 influential fashion and beauty blogs. Fewer than 350 of more than 150,000 posts contained disclosures [itself a troubling number]; but the higher the rate of disclosures, the more positive the reader comments. The researchers then did a series of experiments comparing participants’ reactions after reading blog posts with and without various types of disclosures. Study participants who read a blog post about apartment decorating were more likely to share the post if they read the version with a conflict of interest disclosure,…”

As noted by the authors, the reason COI disclosures have this positive effect is that they act “as a heuristic cue [i.e., a mental short cut] to infer greater trust in the blogger’s expertise and consequently greater persuasion.” Looking forward, however, as “COI disclosures become more pervasive, the heuristic effect of COI disclosure might disappear over time.” But until that day comes, C&E professionals need to make sure —  in reviewing COI disclosures and designing mitigation plans —  not to be unduly affected by the fact of disclosure itself.

Indeed, this study might be worth mentioning  in training managers.  That is, the message that COI disclosure could actually be good for business — which seems a fair reading of the results — could be a persuasive (albeit novel) way of encouraging disclosures.

(There is much more to this paper than what I have touched on above, and I encourage you to read the original.)