The Effects of Accountable Advice

The literature on advised decision making finds that a third-party advisor allows a decision maker to deflect blame for an unfair action and largely escape accountability for this unfair action. In the context of the consulting industry, we ask whether direct accountability of the third-party advisor, i.e. a consulting company, may change both the advice of a third-party advisor and ultimately whether or not the decision maker chooses a fair or unfair action. We answer this question by conducting a lab-experiment in which we vary whether the advisor is accountable or not. We find that direct accountability reduces the probability of both unfair advice and unfair action. We speculate that such accountability applied to the consulting industry may reduce the intrinsic value of firms hiring a consultant through this accountability channel but do not expect firms to no longer hire such agencies as a result.