Advice-giving under conflict of interest: Context enhances self-serving behavior

Advisors face a conflict of interest when their interests and those of the recipients of their advice are misaligned. Conflicted advisors need to resolve the tension between two competing motives, the need to provide sincere advice that fulfills the recipient's goals and the temptation to give advice that caters to their self-interest. We theorized that the choice context should affect selfish advice-giving. Our basic experimental condition presented the advisor with two alternative recommendations, one optimal for the recipient, and one preferable for the advisor. We hypothesized that introducing a third (inferior) alternative (in the context condition) should increase the advisor's tendency to give selfish advice. In Study 1, advisors who were instructed to transmit a recommendation to an anonymous recipient, were more selfish in the context than in the basic condition. Study 2 further found that the effect was obtained when the third alternative was strictly dominated by the selfish recommendation. Studies 3–4 tested the idea that forewarning advisors about the need to explain their choices should moderate the effect. Study 5 tested the advisors' awareness of the context effect. Studies 6–7 investigated the reactions of advice recipients and social observers to selfish advice-giving and found them also biased by context. Our theoretical account posits a reference-based evaluation process. This mechanism explains the advisors' tendency to give selfish advice as well as the social actors' reactions to the transmission of such advice. We discuss the context effect in relation to the asymmetric dominance effect, social preferences, and ethical decision making.