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Detecting Lies in the Financial Industry: A Survey of Investment Professionals' Beliefs

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  • Maria Hartwig
  • Jason A. Voss
  • D. Brian Wallace

Abstract

Research suggests that interpersonal deception is a common phenomenon in many settings. However, to date no research has examined lying and lie detection in the financial industry. This paper presents an empirical examination of investment professionals' beliefs about deception. We obtained survey data from 607 CFA Institute charter holders across the world. Three aspects of deception were included in the survey. First, respondents' beliefs about the behavioral characteristics of lying were examined. Second, perceptions of the prevalence of lies in professional and everyday life were mapped. Third, respondents were asked to estimate their ability to distinguish between lies and truths. The results showed that respondents subscribed to common misconceptions about deceptive behavior, in particular the beliefs that liars are gaze aversive and fidgety. Respondents believed that lying occurs on a daily basis, and that their accuracy in detecting lies exceeds 65%. Previous research suggests that this estimate may be overconfident. Implications of these results and directions for future research on deception in the financial industry are discussed.

Suggested Citation

  • Maria Hartwig & Jason A. Voss & D. Brian Wallace, 2015. "Detecting Lies in the Financial Industry: A Survey of Investment Professionals' Beliefs," Journal of Behavioral Finance, Taylor & Francis Journals, vol. 16(2), pages 173-182, April.
    • Handle: RePEc:taf:hbhfxx:v:16:y:2015:i:2:p:173-182
    DOI: 10.1080/15427560.2015.1034862
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    Cited by:

    1. Lu-Ming Tseng, 2019. "How Implicit Ethics Institutionalization Affects Ethical Selling Intention: The Case of Taiwan’s Life Insurance Salespeople," Journal of Business Ethics, Springer, vol. 158(3), pages 727-742, September.

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