Assessing your “conflict-of-interest discount”

In The Conflict-of-Interest Discount in the Marketplace of Ideas https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4979205  John Barrios of Yale University, together with other scholars, conducted a survey of “economists and a representative sample of Americans to infer the reduction in the perceived value of a paper when its authors have conflicts of interest (CoI), i.e., they have financial, professional, or ideological stakes in the outcome of the results. On average, a CoI decreases trust in the conclusions of an economics paper by 30%. This reduction in trust reflects a combination of the frequency of conflicted papers and the bias of papers when they are conflicted.”

“ To isolate the second term, we introduce a key construct: the CoI Discount, which measures the reduction in the value of a conflicted paper relative to a non-conflicted one. We show that, on average, conflicted papers are worth less than half of non-conflicted ones.”

The study provides detailed findings on different types of CoIs: (i) monetary incentives, (ii) career incentives, (iii) access to data, (iv) academic conflict, and (v) ideological conflict.

The study will likely be of  greater interest to academics than others. However, I can see companies developing compliance and ethics training in which trainees are asked (perhaps in a focus group setting) what the applicable discount would be in different circumstances .  E.g., how a customer’s trust in the company might be discounted by learning of questionable gift giving or hiring practices.