We would like people to value us based on merits, but often others judge you by superficial things. For instance, a recent research demonstrated that people trusted predictions of analysts more based simply on their names.
Do I trust your name?
Our perceptions are influenced by numerous factors, many of which we don’t even realize ourselves. According to a recent study, people trusted predictions of certain stock market experts more, as determined by their surnames.
Predictions of experts with “favourable” names elicited stronger market reactions than a prognosis by someone whose surname was perceived as “unfavourable”.
Moreover, what was considered favourable and unfavourable also changed based on political situation at the time.
UK researchers checked stock market reactions following 9/11 attacks in the USA. Reactions to predictions by analysts with Middle Eastern names weakened, while forecasts by other experts had an effect.
When governments of France and Germany expressed their negative views to the Iraq war led by the USA, reactions to experts with French or German surnames weakened. If the first name of the analyst was not American, the effect was even stronger.
Historical records of the immigration to the USA were used to determine the country of origin for a given surname.
Trust is given, not earned?
Investors are some of the more acute people and they were likely to “have an inkling” not to trust forecasts of people who were seen as part of political opposition at the time. Professor Jay Jung pointed out that the forecasts’ timeliness and accuracy were not linked to the level of trust by the market players, but rather the identity of the author, in this case, based on the name and its perceived origin.
“Perception is projection” led to perception becoming a reality.
Jung pointed out, “We found that, conditional on good forecasting performance, having a favourable surname made it more likely for an analyst to get elected as an All-Star analyst and survive in the profession when his or her brokerage house went out of business or went through a M&A (mergers and acquisition) process.”
The market reacted faster on forecasts of analysts with favourable surnames, leading to price abnormalities in some instances.
Based on current political associations, people from other countries such as Russia or Ukraine may have different biases towards surnames as compared to the USA or UK. Women from Ukraine, for instance, would be positively biased towards Americans, while Russian ladies could unconsciously prefer German or French names.
Did you notice such biases towards you based on the home country of the lady?