Countless bloggers are paid by the companies they write about, but analysts believe few disclose those financial relationships. A new study shows that even when bloggers mention conflicts of interest, the information may make readers more likely to follow their advice, rather than less.
It sounds counterintuitive, but the study suggests we automatically process the disclosure as a signal that the blogger is an expert – perhaps because we’re so overloaded with information we don’t fully consider what the conflict means.
“Disclosure can have unintended consequences,” said Sunita Sah, the John and Norma Balen Sesquicentennial Faculty Fellow and assistant professor of management and organizations in the Samuel Curtis Johnson Graduate School of Management. Sah’s paper, “Conflict of Interest Disclosure as an Expertise Cue: Differential Effects Due to Automatic Versus Deliberative Processing,” was published in July in Organizational Behavior and Human Decision Processes.
“Disclosure cannot be a panacea for managing conflict of interest,” Sah said. “If disclosure is there to protect consumers, it’s having an adverse effect, which is probably not what the policymakers intended.”
These misinterpretations can have a significant impact when people are making important medical or financial decisions, Sah said.
“The burden of having to make that decision and think about different options interferes with the process of evaluating disclosures deliberatively,” she said. “It’s just one extra thing consumers have to worry about.”
In the paper, co-authored with Prashant Malaviya and Debora Thompson of Georgetown University’s McDonough School of Business, the researchers examined two years of posts in 60 influential fashion and beauty blogs. Fewer than 350 of more than 150,000 posts contained disclosures; but the higher the rate of disclosures, the more positive the reader comments.
The researchers then did a series of experiments comparing participants’ reactions after reading blog posts with and without various types of disclosures. Study participants who read a blog post about apartment decorating were more likely to share the post if they read the version with a conflict of interest disclosure, and more likely to share if the disclosure was at the end of the post, rather than the beginning.
Researchers then asked participants who read a post ending with a conflict of interest disclosure to write down their thoughts about it. This appeared to lessen the positive effect of disclosure, but it did not always reduce trust lower than those who saw no disclosure at all.
Additionally, those who naturally tend to deliberate more on information, as measured by a scale called “need for cognition,” were less likely to share or trust posts that disclosed financial conflicts of interest.
Sah said the findings indicate a need for improved consumer protection.
“If people want to protect themselves, they have to deliberate more and understand the meaning of the disclosure,” she said. “However, a better approach would be to place the burden of managing conflicts of interest on advisers or regulators to encourage reduction or elimination of such conflicts.”