Can we Regulate 'Good' People in Subtle Conflicts of Interest Situations

46 Pages Posted: 22 Jul 2014 Last revised: 6 Dec 2016

See all articles by Yuval Feldman

Yuval Feldman

Bar-Ilan University - Faculty of Law

Eliran Halali

Bar-Ilan University - Department of Psychology

Date Written: July 21, 2014

Abstract

In recent years there has been a flurry of research on what has been termed bounded ethicality. This literature has started to uncover the automatic mechanisms involved in situations in which people engage in misconduct without full awareness to the wrongdoing associated with their action. In the present paper we attempt to explore the behavior of people in situations of subtle conflict of interest typical of legal and organizational contexts. The paper examines the efficacy of deterrence and morality in preventing people who face subtle conflict of interest dilemmas from favoring their self-interest over their professional integrity, and in causing them to behave in an objective way. The self-interest may be explicit and instrumental or more subtle and identity-based (for example, American patriotism). Given that some of the decisions to engage in such misconduct are not based on deliberate choice, the paper examines the ability of deterrence and morality to curb unethical behavior both explicitly and implicitly. The research is based on a sample of 523 participants recruited from mTurk, who were asked to give their objective evaluation of the need to fund and help a described research institution. Various conditions were formulated, creating the opportunity for participants to advance either their material or identity-based self-interest by shifting their judgment in favor of the described institution. Then participants were assigned to a few randomized groups, where the experimenter, both, informed them implicitly and explicitly, of a situation in which they were exposed either to a condition of a threatened penalty or to a condition with appeal to morality. The results of the research demonstrate that the money-based conflict was much more likely to corrupt people than was the identity-based conflict. The research also showed that overall explicit mechanisms had a greater effect on making people more objective than did implicit mechanisms, and that the efficacy level of the various enforced mechanisms interacted with both types of misconduct. We have also identified a chilling effect that took place when participants were exposed to explicit enforcement mechanisms, causing them to be even more objective relative to the control group when no conflict was present. Moreover, people who were assigned to the explicit measures of both morality and deterrence were more likely to report noticing the effect of the conflict on their behavior, than were those who were in the implicit condition. Overall, the findings of the paper contain a mixture of good and bad news for anyone interested in understanding the implications for legal policy-making of the new view on "good people doing bad things." At the same time, we show how little is needed to create a risk to the integrity of the individual, and we suggest that a small intervention could easily remedy much of the wrongdoing associated with such subtle conflict of interest.

Keywords: Behavioral Ethics; Conflict of Interest; Deterrence, Morality; Implicit Corruption

JEL Classification: K23; K42

Suggested Citation

Feldman, Yuval and Halali, Eliran, Can we Regulate 'Good' People in Subtle Conflicts of Interest Situations (July 21, 2014). Available at SSRN: https://ssrn.com/abstract=2469346 or http://dx.doi.org/10.2139/ssrn.2469346

Yuval Feldman (Contact Author)

Bar-Ilan University - Faculty of Law ( email )

Faculty of Law
Ramat Gan, 52900
Israel

Eliran Halali

Bar-Ilan University - Department of Psychology ( email )

Israel
972-3-531-8717 (Phone)

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