With our company name being Deception And Truth Analysis (D.A.T.A.) you are forgiven for thinking that we value honesty above all other values. Yes, we believe honesty is a crucially important value, but we believe that compassion is even more important. But compassion is not just important to us, we believe that finance and investing are made better by an emphasis on compassion first, then honesty. Here’s why…
Reason One: Deception is a Part of What it Means to be Human
A consistent finding in social psychology is that people lie approximately twice per day and on most days.[i] In our favorite recent study[ii]researchers found the following about people’s deception:
1. Researchers examined 116,366 lies told by 632 participants over 91 days, or 2.02 lies per person per day.
2. Overall, the number of survey days was 57,310[iii]and the following was found:
a. 36.6% of days were 0-lie days
b. 19.7% of days were 1-lie days
c. 16.4% of days were 2-lie days
3. 92.5% of days were involved 5 or fewer lies.
4. 4.5% of days were 20+ lie days.
5. 88.6% of lies were reported as “little lies” and 11.4% were reported as “big lies.”
6. Participants said that about 7.3% of their communications are lies.
7. The range of lies told was 0 to 200+ per day (!).
8. 50.6% of lies are told to friends, 20.8% are told to family, 11.3% are told to school/work colleagues, 8.9% are told to strangers, and 8.5% are told to casual acquaintances.
9. Among those who lied frequently there were clusters in the data. The high-frequency liars lied on average 5.2 times per day, while the extremely high-frequency liars lied on average 17.5 times per day.
As the above data show, and this data is consistent with other previous findings, it is a fact that we all lie. Consequently, we must be compassionate of people caught lying because it is a part of what it means to be human. To lack compassion for liars would be to cheat people of their humanity.
It is true that lying also robs people of their humanity. Don’t get us wrong, we are not encouraging deception. Instead, we are acknowledging that deception is a part of being social creatures. We are also advocating that compassion is a more important value than honesty.
In finance and investing we have a fiduciary duty to our clients which is grounded in compassion for them and their circumstances. Disclosure, transparency, and honesty are all in service to our fiduciary duty of care.
Yes, there are pathological liars (see the above data that we quoted) and a whole caste of people who disabuse the truth wantonly. It is these types of people that motivate us at D.A.T.A. to do our work and provide you with game-changing technology for assessing documents authored by these kinds of people. Nonetheless, it is true that lying seems innate to what it means to be human.
Reason Two: It is Logically Demonstrable
It is not just a preference for compassion that leads us to rank it before honesty among our values, it is also logical to do so. The very fact that we frequently choose when to deceive or lie is evidence of our awareness that there is something more important than our honesty. That is, we check in with our goals or another’s emotions before electing to deceive. In other words, we consider the bigger picture first, before deceiving.
Intrinsically we recognize that information – as might be communicated by our honesty – is powerful and should be in service to something else. Let’s explore this a little bit more deeply.
First, honesty is a form of opinion-based communication that aims to improve the accuracy of information. In turn, attempting to improve the accuracy of information is in service to the values of rationality and trust-building. For example, the core of science is scientific method, which holds that if something is predictably repeatable then it may be trusted as being true and accurate. In turn, honesty, because it can beget trust is also linked to human rights.
Each of these values – reason, trust, and human rights – are things we only find valuable because of the demonstrable good they do for people. Implied then is a notion that what we care about in being honest is doing good for people. This is strong evidence then that there is a broader, more foundational value from which our admiration for reason, trust, and human rights springs from; namely, compassion.[iv]
So, what is compassion? From dictionary.com comes the following definition:
“[A] feeling of deep sympathy and sorrow for another who is stricken by misfortune, accompanied by a strong desire to alleviate the suffering.”
At D.A.T.A. we have a wider view of compassion than the definition above. Our thinking approaches the notion of compassion as defined in Buddhism (though we are not a Buddhist company). In Buddhism compassion is a paramount value and central to its philosophy, values, and practice. For such a widely used term it is difficult to settle on a single definition, but we appreciate the following discourse on Buddhist compassion (edited for readability):
“While lay concepts of compassion are of warm feelings for particular people in need, Buddhist compassion is not particular, warm, or even a feeling…While Buddhist’s do not deny the natural feelings that may arise from seeing another in need, this is not the compassion Buddhism values. Instead, Buddhist compassion is the result of knowing one is part of a greater whole and is interdependent and connected to that whole.”[v]
Among the Founders at D.A.T.A., compassion boils down to treating others how you would like to be treated. This is in alignment with the above Buddhist definition of compassion that recognizes our shared responsibility and interdependence on a connected whole. In this relationship there must be a perceived equilibrium between people. If there is not a perceived equilibrium among people then a person’s honesty is likely to be interpreted by others as un-equal – that is, selfish and/or judgmental – and thus the honesty is likely rejected. Thus, delivering honesty without compassion is a self-defeating activity.
Capitalism relies on an exchange between seller and buyer. For that exchange to have equilibrium and to be ethical (i.e. compassionate) requires information symmetry, and a mutual respect for the other person in the transaction. Absent a perceived equilibrium there is no transaction. Finance and investing has as its foundation capital markets. Thus, compassion is core to assuring that people trust the other party well enough to transact.
As an example of why compassion is greater than honesty in finance and investing, there is a crucial difference between disclosure/honesty and compassion. We are likely all familiar with the firms and financial pros who bury the expenses of their products and services in massive disclosure documents. This is a form of honesty, but it is not compassionate. The reason is that it lacks a respect for the client to whom we owe a fiduciary duty. Compassion requires that we not only be honest with our clients via disclosure, but that we are assured that our clients understand their expenses and how it affects the performance of their products. Compassion > honesty.
Reason 3: Honesty is Grounded in Opinions
Next, at D.A.T.A. we recognize that honesty is typically grounded in someone else’s understanding of the facts of a situation. For example, witness testimony in criminal cases is notoriously unreliable as for every person, an opinion. Behavioral finance has as its central thesis that people make poor decisions based on information because of our filtering of information through our prejudices, preferences, and biases.
Even in the hard sciences – those most objective of disciplines – truth evolves and changes. For example, according to Isaac Newton and Western science for hundreds of years, the formula of F = MA best described the relationship of a body in motion to the forces created by this motion. That is, F = MA was “truth.”
However, this truth, highly descriptive of physical phenomenon for centuries withered in the face of some astronomical data, revealing that it might be flawed. This gap between F = MA and physical reality led scientists in the 19th century to begin researching how to better describe the physical world around them, culminating in Einstein’s newer and better “truth” of E = MC2. So “truth” in science is still an opinion about how best to describe reality.
At D.A.T.A. we believe it is only logical then to recognize that for every person, an opinion. In turn, contained in every opinion is a probability that we are wrong. Without acknowledging that your “truth” is an opinion and that it may be wrong is selfish and out of accord with the social milieu in which we all live. Therefore, it is logical that compassion be more highly valued than honesty. Only with compassion present do we acknowledge multiple truths as possibly being true and simultaneously.
Last on this point, can you more easily subvert honesty or compassion? What if a Nazi, circa 1940 Poland asks if you are harboring Jews in your house? Which is easier to subvert: compassion or honesty? The answer should be obvious: honesty.
Reason 4: Our Algorithm is Correct 7 in 8 Times
Our final reason for why D.A.T.A. places the value of compassion before honesty is that we know our algorithm is only correct seven out of every eight times we evaluate documents. While an 88.4% accuracy rate may sound impressive, it also means that we misjudge approximately one of every eight documents we assess. In fact, some of D.A.T.A.’s own communications that we believe in our heart of hearts are honest have been assessed by our algorithm as deceptive.
The nature of all computer-algorithmic and human judgments of personality is that they are tough to do. Our best assessment is still probabilistic, not deterministic. Not only that, but ground truth is extremely difficult to establish. We have an entire article where we discuss what the D.A.T.A. Score means. Essentially, it means that a given document or language fragment has a high proportion of language similarity to known examples of written deception.
In other words, even given our accuracy, we recognize that our judgments are probabilistic and that there is a chance that we are wrong. Consequently, our work must be grounded in compassion; we judge the language in documents, not people.
Conclusion
At Deception And Truth Analysis we place the value of compassion before the value of honesty. We do this because we know that deception and lying are a part of what it means to be humans operating in a complex social milieu. We also know that compassion is logically more important than honesty because pursuing the truth is meant to improve the good of all people. D.A.T.A. also acknowledges that honesty and the purported “truths” conveyed by it are frequently an opinion; even in the hard sciences. Last, the D.A.T.A. algorithm is only 88.4% accurate and we hold out compassion for those assessed incorrectly by our algo.
[i] See: DePaulo, B. M., Kashy, D. A., Kirkendol, S. E., Wyer, M. M., & Epstein, J. A. (1996). “Lying in everyday
life.” Journal of Personality and Social Psychology, 70(5), 979–995 and Serota, K. B., Levine, T. R., & Boster, F. J. (2010). “The prevalence of lying in America: Three studies of self-reported lies.” Human Communication Research, 36(1), 2–25.
[ii] Serota, Kim B., Timothy R. Levine, & Tony Docan-Morgan (2021). “Unpacking variation in lie prevalence: Prolific liars, bad lie days, or both?” Communication Monographs
[iii] Survey days = (participants x days) – exclusions
[iv] This discussion mirrors the fantastic case made by Daniel Strain here: Hancock, Jennifer. “What is more important: Honesty or Compassion?” Spiritual Naturalist Society: Happiness through Compassion, Reason, and Practice. https://www.snsociety.org/what-is-more-important-honesty-or-compassion-2/ Accessed: 3 October 2022
[v] Goetz, Jennifer. “Research on Buddhist Conceptions of Compassion: An Annotated Bibliography.” Greater Good Magazine: Science-Based Insights for a Meaningful Life. https://greatergood.berkeley.edu/article/item/buddhist_conceptions_of_compassion_an_annotated_bibliography Accessed: 3 October 2022
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