From dress to personal finance
This July, swimsuits and other summer outfits are out, while a good number of clothes, often more in line with the business world, are put away in the closets. This is an opportunity to really check whether "clothes don't make the man".
What if you opted for a white coat?
Let's put aside the summer clothes and take a look at the conclusions of an experiment(1) conducted with volunteers who had to answer attention tests in the form of difference games...
The latter showed that:
The simple wearing of a gown leads to a 50% reduction of errors in visual tests;
When the white coat is presented as a painter's smock to one half of the sample and to the other half as a doctor's gown, the success rate of the "doctors" in the attention tests is almost 20% higher!
This study confirmed the results of various experiments evaluating the link between clothing and our state of mind. Although we are on holiday, we can mention the importance for teachers to dress formally to appear more intelligent(2). Another illustration is that of companies that choose to display portraits of famous men or recognized professionals in their meeting rooms instead of works of art. These arrangements would allow participants to identify themselves with good men, to improve their behaviour and to make better decisions (by conformism).
There's only one step from sports shoes to financial risk!
These few examples describe the priming effect, whereby our actions are stimulated by words or by a context. Unfortunately, our investment decisions are not necessarily immune to this conditioning: our investment choices in an asset class or sector theme can be influenced.
A recent study(3) looked at priming effect linked to brands. Specifically, the authors examined the relationship between prolonged exposure to athletic shoe brand logos with varying degrees of boldness and risk-taking in the financial decisions of individuals so conditioned. They found that individuals exposed to brands with bold connotations were more likely to choose to take risks. In the light of this, it is easy to imagine how important the visuals accompanying financial product proposals can be in our assessment of risk.
It's time for a swim, so let's hope that your nice swimsuit will put you in the right condition to succeed in your dives!
(1) "Enclothed cognition» by Adam, H and Adam Galinsky", 2012
(2) "Influenceof dress on perception of intelligence and expectations of scholastic achievement," Behling& Williams, 1991
(3) Brand priming effect on consumers' financial risk taking behavior", Danielle Mantovani, Fábio Henrique Silva Galvão of the Universidade Federal do Paraná - Curitiba/PR, Brazil