Purpose: Counter-knowledge is knowledge learned from unverified sources and can be classified as good (i.e. harmful, for instance, funny jokes) or bad (for example, lies to manipulate others' decisions). The purpose of this study is to analyse the relationship between these two elements and on the possible reactions they can induce on people and institutions. Design/methodology/approach: The relationships between good and bad counter-knowledge and the induced reactions – namely, evasive knowledge hiding and defensive reasoning – are analysed through an empirical study among 151 Spanish citizens belonging to a knowledge-intensive organization during the COVID-19 pandemic. A two-step procedure has been established to assess a causal model with SmartPLS 3.2.9. Findings: Results show that good counter-knowledge can lead to bad counter-knowledge. In addition, counter-knowledge can trigger evasive knowledge hiding, which, in turn, fosters defensive reasoning, in a vicious circle, which can negatively affect decision-making and also cause distrust in public institutions. This was evidenced during the covid-19 pandemic in relation to the measures taken by governments. Originality/value: This study raises the awareness that counter-knowledge is a complex phenomenon, especially in a situation of serious crisis like a pandemic. In particular, it highlights that even good counter-knowledge can turn into bad and affect people's decisional capability negatively. In addition, it signals that not all reactions to the proliferation of counter-knowledge by public institutions are positive. For instance, censorship and lack of transparency (i.e. evasive knowledge hiding) can trigger defensive reasoning, which can, in turn, affect people's decisions and attitudes negatively. [ABSTRACT FROM AUTHOR]