Key Scientific Paper Redux – Are You for Real?

Most investment professionals at one time or another find themselves sitting across from someone whose information they are reliant upon as authentic to make a decision. This could be an executive at a company in which we hope to make an investment. It could be a sell-side analyst. Or in private markets, it could be the owner of an asset in which we hope to make an investment. Whatever the milieu, being able to assess authenticity is key to trusting the information you receive.

But what if it is the case that most of us are not good at evaluating authenticity, let along deception? That is the subject of the latest in our series of Key Scientific Paper Redux articles which distills the key insights of “Are You for Real? Perceptions of Authenticity Are Systematically Biased and Not Accurate.”[i] This paper is important because it reaffirms what we know at Deception And Truth Analysis (D.A.T.A.) to be true: people, even trained experts, are poor at deception detection.

Are You for Real?: Study Details

First, the study’s authors acknowledged the multi-decade research history demonstrating that people are very poor at deception detection (see our article on this very subject). Second, they postulate that lying is an extreme form of inauthenticity and that authenticity is likely even harder to detect than deception. Third, they also hypothesized that there would be asymmetries between self- and other-perceptions. Specifically, they believe that there is a positive correlation between rating yourself as authentic and rating others as authentic, too.

Are You for Real? conducted three separate studies and uniquely, the study’s authors used randomly assigned groups of people who did not know very much about one another. They then followed these groups for 6 weeks and surveyed them about their own authenticity and the authenticity of all other group members.

Here are the details of the three studies:

1. Key assumption: All three studies have a critical belief embedded in their logic. Namely, that an individual’s ratings of their own authenticity may be taken as ground truth.
2. Studies 1a and 1b sought to confirm people’s beliefs about their abilities to detect authenticity. Study 1a was an online survey of beliefs answered by 140 people about their beliefs about authenticity detection capabilities. Study 1b was identical but the survey takers were MBA students and probably an interesting comparison can be made with investment professionals.
3. Study 2 examined both the accuracies and biases in authenticity detection. Those involved in the study numbered 207 and were MBA students rating themselves and others for authenticity. Total observations were 1,033.
4. Study 3, like study 2 also tested accuracy and biases in detecting authenticity, but also sought insights about how authentic people believe they come across to others. Total subjects in this study were 571 MBA students making 3,007 observations and conducted six months after Study 2.
5. To demonstrate that authenticity is a difficult thing to measure, the studies’ authors had subjects take the Big 5 Personality Traits and rate their fellow group members on the same 5 categories.

Are You for Real?: Major Findings

1. Laypeople think they are good at detecting authenticity. Laypeople, with statistical significance, believe that they can detect authenticity, rating their abilities a 5.16 on a 7-point scale where a 7 meant “I can tell when people are being real.”
2. MBA students think they are good at detecting authenticity. MBA students, with statistical significance believe they can detect authenticity, rating their abilities a 5.44 on the same scale 7-point scale mentioned above. It is interesting to see that MBA students believe they have a greater capability than laypeople.
3. Laypeople rate authenticity as very important to them. Laypeople, on a 1-100 point scale, with 100 being highest, rated authenticity as being on average 78.24 in importance to themselves.
4. MBA students rate authenticity as being more important to them than laypeople believe it to be. MBA students rated authenticity as 85.60 in importance to themselves on the same 1-100 point scale.
5. MBA students are good at rating others’ personality traits. In study 2, MBA students’ self-ratings on the Big 5 Personality Traits positively and significantly predicted their ability at rating others for:

• a. Extraversion
• b. Conscientiousness
• c. Agreeableness
• d. Neuroticism

But self-ratings for Openness to Experience did not predict other-rated Openness to Experience. These results suggest that people are frequently good at rating others’ personality traits.

6. People rate themselves lower on authenticity than others. Probably because they know how authentic they are being, or not. Participants’ self-ratings for authenticity were statistically significantly lower (average 5.27) than that of others (average 5.84). This makes sense because people generally have a better idea about their own levels of inauthenticity than they do in those of others.

7. People cannot discern others’ authenticity. This is similar to their poor deception detection capabilities. Other-ratings of authenticity did not correlate with any self-rated measure of authenticity in both Studies 2 (β = 0.04, p = 0.132) and 3 (β = 0.01, p = 0.585). Because the slope is flat and not steep it means observers could not discern the level of authenticity that people felt about themselves. Also, the high p-values indicate that people do not have the ability to discern another’s authenticity.

8. Authentic people suffer from representativeness bias. Authentic-raters rated other individuals as more authentic. This means raters were biased by their own authenticity (β = 0.36, p < 0.001).

9. People’s expectations that other people will see them as authentic were uncorrelated with other ratings of authenticity (β = 0.02, p = 0.278).

Quotes of Note

1. “In the 2016 presidential election, Donald Trump was dubbed the ‘authenticity candidate’ despite a prolific record of deception. On the other hand, his opponent Hillary Clinton was accused of coming across as cold, calculated, and inauthentic—even being described as ‘at pains to convince Americans that she is a real person.’ The perception that one is authentic is non-trivial – individuals who are perceived to be authentic are more liked and more trusted.”
2. “Given that authenticity is tied to a core or true self unique to each person, authenticity is expressed differently between individuals. This constitutes a challenge to accurate authenticity perception.”
3. “There are a number of additional explanations for why it is difficult to accurately perceive authenticity in other people. First, authenticity may be hard to observe, whereas inauthenticity is not… Second, it may be easier to fake the earmarks of authenticity than it is to authentically meet them.”

[i]Bailey, Erica R. and Aharon Levy. “Are You for Real? Perceptions of Authenticity Are Systematically Biased and Not Accurate.” Psychological Science 2022, Vol. 33(5): 798-815