
Contents
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I. Introduction I. Introduction
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II. Choosing for Others: Construal Level Theory II. Choosing for Others: Construal Level Theory
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III. Heuristics and Biases III. Heuristics and Biases
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A. Prospect Theory A. Prospect Theory
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1. Loss Aversion 1. Loss Aversion
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2. Risk Perceptions 2. Risk Perceptions
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B. Intertemporal Discounting B. Intertemporal Discounting
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IV. Moral Reasoning in the Principal-Agent Context IV. Moral Reasoning in the Principal-Agent Context
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A. Self-Serving Biases A. Self-Serving Biases
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B. Disclosure Approaches to Regulating Conflicts of Interest B. Disclosure Approaches to Regulating Conflicts of Interest
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V. Social Consequences of Deciding for Another V. Social Consequences of Deciding for Another
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A. Impression Management A. Impression Management
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B. Accountability B. Accountability
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C. Hindsight Bias C. Hindsight Bias
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VI. Conclusion VI. Conclusion
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Acknowledgments Acknowledgments
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37 Fiduciary Law and Psychology
Get accessTess Wilkinson-Ryan, University of Pennsylvania
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Published:09 May 2019
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Abstract
This chapter considers the psychology of fiduciary law, with particular emphasis on how the principal-agent dynamic affects judgment and decision-making. From a decision-making perspective, a characteristic of fiduciary behavior is that fiduciaries choose for others. Behavioral decision research has focused on the ways that actors decide differently when they are acting for others rather than acting for themselves. To introduce readers to the psychology of self-other decision-making, this chapter reviews the theoretical framework within which these questions have been situated, along with some of the most relevant and intriguing experimental research. Three principal areas of research are discussed: the effect of social distance on the mental operations utilized in judgment under uncertainty; the moral psychology phenomena around navigating conflicts of interest; and the specific social dynamics of deciding in the context of a relationship, whether one-shot or ongoing. The chapter examines the concept of “psychological distance” as an integral component of construal level theory, and the extent to which heuristics and biases are acute for agents and principals. Along the way, Prospect Theory and concepts such as loss aversion, risk perceptions, intertemporal discounting, self-serving biases, disclosure approaches to regulating conflicts of interest, impression management, accountability, and hindsight bias are explored.
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