### abstract ###
this paper explores the psychology of conflict of interest by investigating how conflicting interests affect both public statements and private judgments
the results suggest that judgments are easily influenced by affiliation with interested partisans  and that this influence extends to judgments made with clear incentives for objectivity
the consistency we observe between public and private judgments indicates that participants believed their biased assessments
our results suggest that the psychology of conflict of interest is at odds with the way economists and policy makers routinely think about the problem
we conclude by exploring implications of this finding for professional conduct and public policy
### introduction ###
in many situations  professionals are called upon to play dual roles that require different perspectives
for example  attorneys embroiled in pretrial negotiations may exaggerate their chances of winning in court to extract concessions from the other side
but when it comes time to advise the client on whether to accept a settlement offer  the client needs objective advice
professors  likewise  have to evaluate the performance of graduate students and provide them with both encouragement and criticism
but public criticism is less helpful when faculty serve as their students' advocates in the job market
and  although auditors have a legal responsibility to judge the accuracy of their clients' financial accounting  the way to win a client's business is not by stressing one's legal obligation to independence  but by emphasizing the helpfulness and accommodation one can provide
traditional economic models of rationality would assume that people can perform optimally in such situations  making unbiased judgments when it is in their interest to do so  but taking a partisan stand when this is called for strategically
this paper asks whether these dual roles are psychologically feasible  that is  can one person successfully play different roles that require different  and often competing  perspectives
in our attempt to answer this question  we explore the psychology of conflict of interest by comparing alternative explanations for their effects
after reviewing research on whether and when people are able to play dual roles  we present findings from three studies
these studies examine a fairly typical business situation - a situation in which an advocate must provide a deliberately partisan valuation of a company and then is asked to provide an impartial valuation of the same company
we ask whether these advocates can successfully make impartial  unbiased judgments in situations characterized by such dual roles
we conclude by speculating about the implications of this psychological finding to issues of professional conduct  public policy  governmental regulation  and organizational design
