So many would believe that following the advice of an expert in a field would be beneficial. Few people are completely knowledgeable in every decision they need to make, so why not go to someone who is more knowledgeable. This is why we go to mechanics to tell us what is wrong with our car, this is why we go to salesmen in stores to tell us what we should buy, and this is why we go to doctors to tell us what is wrong with us.

Sure most people know and joke about needing a trustworthy mechanic or mechanics who try to fix unbroken things in your car and charge twice what it really cost. Its somewhat obvious that they have a monetary motive to convince you that you should pay for extra things to be fixed. The question with this is knowing this how much can you actually trust the expert. Yes, they know the truth, and the best possible course of action for you, but is that what they are going to tell you when they stand to profit if you follow some different advice? Similarly salesmen in stores also may be considered experts in their field, such as telling what appliance would best suit you, or what type of computer would be best for your needs. However like mechanics these workers may be paid biased on commission and as a result may benefit more should they convince you to buy something more expensive than you need.

While mechanics and salesmen are obvious examples of bias experts, doctors in cases also my have a bias. Doctors, the people with whom you place your live in the hands of, may suggest medicines that may be unnecessary, or less effective than others just because of benefits they receive from pharmaceutical companies.

While this is an issue, in most cases consumers know that their salesmen or mechanic may be biased. or their doctor may be suggesting a product is biased of a relation with a pharmaceutical company. Given this would people be able to account for the bias. This was tested in a study where a group was told to act as advisors with a conflict of interest. Half of these advisors disclosed their bias, while the other half did not. In the case where the advisors did not disclose their conflict their clients lost money by following the advice, as would be expected. In the other case where the conflict was disclosed the clients still lost money. These advisors knowing that they were to disclose their conflict, exaggerated their bias even greater than those in the first case. As a result the clients in the second group, although they knew the advisors bias, actually lost more money.

Looking at these results we should be able to conclude that although we may look to experts for advice we should never just submit to their advice, but be more aware of all the conflicts in interest their advice may be shrouded in.

source:

http://www.nytimes.com/2007/07/28/business/yourmoney/28instincts.html_r=2&oref=slogin&oref=slogin