Lies That Fool the Liar

Chance and her colleagues conducted a series of experiments that challenged this view.

In the first experiment, half of the participants were given a math test that permitted them to see the correct answers at the bottom of the test paper. After taking the test, they were told they were going to be given a longer test of a similar nature. They were asked to predict their test results on the second test.

Those who saw the answers on the first test were more optimistic about the results of the second test than those who couldn’t see the answers on the first test. Both groups performed about the same on the second test. The first group bought into their deception and believed they were more skilled, rather than attributing their stellar results on the first test to cheating.

Other tests demonstrated that those who were told to imagine cheating on the first test, still predicted they would do better on the second test. These participants also discounted the fact that they cheated on the first test.

Reading Playboy “for the articles”

In another study, participants were asked to choose between two fake sports magazines. Both magazines had the same quality of journalism and similar average issue lengths.

There were two major differences: One magazine had more sports covered per issue than the other and a lower average number of feature articles. In addition, one of the choices was designated as being a “swimsuit issue,” and the other one was the “year’s top 10 athletes” issue.

For half of the participants, the swimsuit issue accompanied the magazine with more sports. For the other half, it accompanied the one with more feature articles.

Overall, participants “overwhelmingly picked the magazine with the swimsuit issue.” They justified their decision by citing sports coverage or features as the reason for their choice. Few admitted that their choice was influenced by a desire to view women in swimsuits.

Positive takeaways

As advisors, you rely on input from your clients in formulating an investment policy statement. For example, you ask clients how much risk they can tolerate, what their retirement goals are, and what legacy they want to leave.

These studies put you on notice that the answers you receive may not be reliable. It’s not that clients are intentionally deceiving you. They may believe what they are telling you is accurate.

Instead of accepting their input at face value, ask follow-up questions. Probe their responses in a non-judgmental way.

If it turns out they have misled you, don’t assume they did so intentionally. Replace judgment with empathy. The macho client who told you they were fine with a risky portfolio, only to panic when the market took a hit, probably believed in his ability to act in a less emotional manner.

Don’t underestimate the power of self-deception by prospects, clients, family and friends and even yourself.

It’s real and powerful.

Dan trains executives and employees in the lessons based on the research on his latest book, Ask: How to Relate to Anyone. His online course, Ask: Increase Your Sales. Deepen Your Relationships, is currently available.

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