The (Honest) Truth About Dishonesty

The riveting (and awfully distressing) Academy Award–winning documentary Inside Job shows in detail how the financial services industry corrupted the U.S. government, leading to a lack of oversight on Wall Street and to the financial meltdown of 2008. The film also describes how the financial services industry paid leading academics (deans, heads of departments, university professors) to write expert reports in the service of the financial industry and Wall Street. If you watch the film, you will most likely feel puzzled by the ease with which academic experts seemed to sell out, and think that you would never do the same.

But before you put a guarantee on your own standards of morality, imagine that I (or you) were paid a great deal to be on Giantbank’s audit committee. With a large part of my income depending on Giantbank’s success, I would probably not be as critical as I am currently about the bank’s actions. With a hefty enough incentive I might not, for example, repeatedly say that investments must be transparent and clear and that companies need to work hard to try to overcome their conflicts of interests. Of course, I’ve yet to be on such a committee, so for now it’s easy for me to think that many of the actions of the banks have been reprehensible.

Academics Are Conflicted Too

When I reflect on the ubiquity of conflicts of interest and how impossible they are to recognize in our own lives, I have to acknowledge that I’m susceptible to them as well.

We academics are sometimes called upon to use our knowledge as consultants and expert witnesses. Shortly after I got my first academic job, I was invited by a large law firm to be an expert witness. I knew that some of my more established colleagues provided expert testimonials as a regular side job for which they were paid handsomely (though they all insisted that they didn’t do it for the money). Out of curiosity, I asked to see the transcripts of some of their old cases, and when they showed me a few I was surprised to discover how one-sided their use of the research findings was. I was also somewhat shocked to see how derogatory they were in their reports about the opinions and qualifications of the expert witnesses representing the other side—who in most cases were also respectable academics.

Even so, I decided to try it out (not for the money, of course), and I was paid quite a bit to give my expert opinion.^* Very early in the case I realized that the lawyers I was working with were trying to plant ideas in my mind that would buttress their case. They did not do it forcefully or by saying that certain things would be good for their clients. Instead, they asked me to describe all the research that was relevant to the case. They suggested that some of the less favorable findings for their position might have some methodological flaws and that the research supporting their view was very important and well done. They also paid me warm compliments each time that I interpreted research in a way that was useful to them. After a few weeks, I discovered that I rather quickly adopted the viewpoint of those who were paying me. The whole experience made me doubt whether it’s at all possible to be objective when one is paid for his or her opinion. (And now that I am writing about my lack of objectivity, I am sure that no one will ever ask me to be an expert witness again—and maybe that’s a good thing.)

The Drunk Man and the Data Point

I had one other experience that made me realize the dangers of conflicts of interest; this time it was in my own research. At the time, my friends at Harvard were kind enough to let me use their behavioral lab to conduct experiments. I was particularly interested in using their facility because they recruited residents from the surrounding area rather than relying only on students.

One particular week, I was testing an experiment on decision making, and, as is usually the case, I predicted that the performance level in one of the conditions would be much higher than the performance level in the other condition. That was basically what the results showed—aside from one person. This person was in the condition I expected to perform best, but his performance was much worse than everyone else’s. It was very annoying. As I examined his data more closely, I discovered that he was about twenty years older than everyone else in the study. I also remembered that there was one older fellow who was incredibly drunk when he came to the lab.