Conflict of Interest is competing loyalties that compromise judgment. It sits in the Cognition dimension (COG) of the Human Behavior Taxonomy™ as element HBT-COG-0173, within the Ethics family. The core principle: competing loyalties that compromise judgment. In incentive terms, it matters because it changes the payoff people perceive before they choose — which means it can be designed for, or exploited.
Scientific Definition
Competing loyalties that compromise judgment.
Plain-English Definition
Competing loyalties that compromise judgment.
Feynman Explanation
Disclosure is the bandage; structural separation is the cure.
Core Principle
Competing loyalties that compromise judgment.
Mechanisms
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Inputs (Triggers)
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Outputs (Behaviors)
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Behavioral Signature
Disclosure is the bandage; structural separation is the cure.
Examples
- An advisor paid by the product they recommend.
- Org structures with built-in COIs leak trust continuously.
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Original analysis from The Incentives Lab — how this element behaves inside real payoff structures.
Why this element matters to incentive design
Executives usually notice this element only after it has cost something. By then it looks like a one-off. It is not. The mechanism underneath it operates in the Cognition dimension — how do we think?. You can recognize it in the field by its signature: disclosure is the bandage; structural separation is the cure. Every element in the Cognition dimension changes the perceived payoff of an action before the action happens, which is exactly where incentive design has leverage.
How it gets exploited
Left undesigned, model vendors evaluating their own models on their own benchmarks. It is amplified whenever org structures with built-in COIs leak trust continuously. Inside organizations that shows up as org structures with built-in COIs leak trust continuously. The pattern is the same one Goodhart's Law describes: the measurable proxy attracts the effort, and the purpose behind it quietly loses funding.
How the Lab designs around it
The redesign move is to separate decision rights from financial interest. Design against it the way you would design against a known failure mode — assume it will appear, and price the exploit before someone finds it.
Famous Experiments
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Design Principles
- Separate decision rights from financial interest.
Measurement Approaches
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Evidence
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The Perverse Incentive Lens™
How this behavior is exploited — and how to redesign around it.
- Separate decision rights from financial interest.
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Interactive Mini Network
Click any neighbor to re-center the graph and follow the threads of connection.
Knowledge Graph Neighbors
Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.
Perceived fairness of outcomes, process, and treatment.
Visible information about decisions, processes, and tradeoffs.
Clear ownership of outcomes, not just tasks.
Asymmetric information attracts the worst counterparties.
We defer to perceived expertise, rank, or uniform.
Vastness that exceeds existing schemas dissolves the self briefly.
Negative feedback returns a system toward a target.
Membership in a group is a baseline human need.
Individually rational choices that produce a collectively bad outcome.
We seek tasks where we feel effective and improving.
Value is judged against whatever sits next to it.
Outcomes depend on aligning choices, not on who 'wins.'
Where Conflict of Interest is cited in the corpus
Essays, field guides, and diagnostics from The Incentives Lab that apply this element.
- EssayGoodhart's Law in the Real World
How measurable proxies capture judgment.
- EssayThe Perverse Incentives Hiding in Your KPIs
Cognitive shortcuts turned into scorecards.
- CourseIncentives 101
The free ten-part primer on reading a payoff structure.
- ReferenceThe incentive glossary
Definitions for every mental model, bias, and fallacy in the corpus.
- ReferenceThe Periodic Table of Human Behavior
The full 1,267-element map this page belongs to.
Questions about Conflict of Interest
- What is Conflict of Interest?
- Conflict of Interest is competing loyalties that compromise judgment. It sits in the Cognition dimension (COG) of the Human Behavior Taxonomy™ as element HBT-COG-0173, within the Ethics family. The core principle: competing loyalties that compromise judgment. In incentive terms, it matters because it changes the payoff people perceive before they choose — which means it can be designed for, or exploited.
- What is an example of Conflict of Interest?
- Org structures with built-in COIs leak trust continuously. The Incentives Lab catalogs everyday, organizational, and historical instances of this element on its Human Behavior Taxonomy™ page (HBT-COG-0173).
- How is Conflict of Interest exploited?
- Model vendors evaluating their own models on their own benchmarks.
- How do you design around Conflict of Interest?
- Separate decision rights from financial interest.
- Which behavioral dimension does Conflict of Interest belong to?
- Conflict of Interest is classified in the Cognition dimension (COG) of the Human Behavior Taxonomy™, family "Ethics", class "Concept". Its permanent identifier is HBT-COG-0173 and its evidence grade is C.