Disclosing decision makers’ private interests

Antoni-Italo De Moragas

European Economic Review, 2022, vol. 150, issue C

Abstract: I study whether a decision maker would make better decisions if his private interests were disclosed. I focus on a delegation relationship in which a decision maker attempts to build a good reputation. I compare the following two scenarios: a non-disclosure case in which the interest of the decision maker is private information and a disclosure case in which his interest is publicly known. I show that the disclosure of the private interests of the decision maker can only improve the decision made when reputation concerns are intermediate, and decision makers are sufficiently informed and public-spirited. Otherwise, disclosure can be detrimental because it induces decision makers to make decisions against their private interests too often. My framework provides a novel cautionary tale regarding the use of disclosure laws to address conflicts of interest.

Keywords: Disclosure; Transparency; Conflict of interests; Accountability (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:eecrev:v:150:y:2022:i:c:s0014292122001702

DOI: 10.1016/j.euroecorev.2022.104282

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