Bounded Ethicality as a Psychological Barrier to Recognizing Conflicts of Interest

doi:10.1017/CBO9780511610332.006

5 - Bounded Ethicality as a Psychological Barrier to Recognizing Conflicts of Interest

Published online by Cambridge University Press: 04 August 2010

Max H. Bazerman and

Edited by

George Loewenstein and

Max H. Bazerman

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Dolly Chugh: Affiliation:
Harvard Business School
Max H. Bazerman: Affiliation:
Harvard Business School
Mahzarin R. Banaji: Affiliation:
Harvard University
Don A. Moore: Affiliation:
Carnegie Mellon University, Pennsylvania
Daylian M. Cain: Affiliation:
Carnegie Mellon University, Pennsylvania
George Loewenstein: Affiliation:
Carnegie Mellon University, Pennsylvania
Max H. Bazerman: Affiliation:
Harvard University, Massachusetts

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Summary

But there is a more subtle question of conflict of interest that derives directly from human bounded rationality. The fact is, if we become involved in a particular activity and devote an important part of our lives to that activity, we will surely assign it a greater importance and value than we would have prior to our involvement with it.

It's very hard for us, sometimes, not to draw from such facts a conclusion that human beings are rather dishonest creatures…. Yet most of the bias that arises from human occupations and preoccupations cannot be described correctly as rooted in dishonesty – which perhaps makes it more insidious than if it were.

– Herbert A. Simon, 1983, pp. 95–96

Herbert Simon's perspective (1983) is broadly compatible with Moore, Loewenstein, Tanlu, and Bazerman's (2003) recent research on the psychological aspects of conflict of interest in the context of auditor independence. Moore et al. (2003) focus primarily on the work on self-serving interpretations of fairness. The current work broadens this theme, and develops a conceptual framework for understanding how unchecked psychological processes work against an objective assessment and allow us to act against personal, professional, and normative expectations when conflicts of interest exist.

Type: Chapter
Information: Conflicts of Interest
Challenges and Solutions in Business, Law, Medicine, and Public Policy
, pp. 74 - 95

DOI: https://doi.org/10.1017/CBO9780511610332.006 [Opens in a new window]

Publisher: Cambridge University Press

Print publication year: 2005

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