The Conflict-of-Interest Discount in the Marketplace of Ideas

Abstract

We conduct 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 nonconflicted one. We show that, on average, conflicted papers are worth less than half of non-conflicted ones, though this effect varies significantly depending on the nature of the conflict. The discount is more pronounced when the conflict involves the interest of a private rather than a public entity. Restricted data access also leads to a substantial discount. We validate our survey based estimates by comparing them to actual biases observed in conflicted papers within the economics and medical literature.