March 18, 2009

Shifty-looking sorts

Reuters reports:

[Jefferson] Duarte [of Rice U.] and co-authors Stephan Siegel and Lance Young, of the University of Washington in Seattle, studied members of Prosper.com, an online lending site where people looking for loans are matched up with individual lenders.

Each Prosper.com loan applicant submitted a profile which included credit and work history, education level, income and an optional photograph of themselves for lender review.

More than 6,800 loan applications, 2,579 loans and 12,200 photographs from Prosper.com were used in the study.

Duarte hired a team of 25 people to rate the applicants' trustworthiness on a scale of one to five using only the photographs of the borrowers. The team also judged the probability that the borrowers would repay a $100 (72 pound) loan.

Those judged to be trustworthy by the team were more likely to get a loan from Prosper.com lenders and tended to have a credit score about 20 points higher than those determined to be untrustworthy, the researchers found.

"Untrustworthy" borrowers were seven percent more likely to default on their loan than a perceived trustworthy borrower with the same credit score.

"There is an array of information that you can get out of the pictures," Duarte said, adding that Prosper.com borrowers use photographs ranging from family portraits to snapshots of their pets.

"The pictures are revealing something about the behaviour of these people that is not taken into account in the credit score model," Duarte said.

To make sure that the evaluators' prejudices did not skew the results, the researchers controlled for race, age, gender, obesity, attractiveness and education, as well as financial factors like employment status, income and homeownership.


Of course, the really dangerous guys are the Bernie Madoffs and Sir Allen Stanfords who make the effort to look trustworthy. But, I'm always struck by how many dubious types make little effort to look less dubious. They seem to feel they are expressing their individualism, the Real Me.

In truth, they want affirmation and support from their peers, who are dubious sorts, too.

For example, why do car salesmen so often dress like car salesmen straight out of the Robert Zemeckis comedy "Used Cars?" Journalist Chandler Philips went undercover for Edmunds and worked at two San Fernando Valley car dealerships. His "Confessions of a Car Salesman" is well worth-reading.
I knew these interviews came in threes, so I wasn't surprised when Craig walked into the room. He told me that he had been a schoolteacher before he got into the car business. I could see him as a teacher — he had a warm, intelligent manner. He said that being a car salesman was hard on your life. "Truth of the matter is, you lose all your friends. Not because you're a car salesman, but because when you're around, they're not. And when they're around, you're not. You wind up making all new friends." ...

Over the next few days I noticed that car salesmen shook hands with each other a lot. I shook hands with each of my team members when I arrived in the morning; we shook hands before we left the dealership at night. We might shake hands with each other two or three more times during the day. If I happened to be standing on the curb and if another salesman walked up I shook hands with him. It was like we were all staying loose, practicing on each other, for that moment when we would greet Mr. Customer and needed to use a good handshake that's going to seal the deal. ...

Car salesmen and women seem to exist in their own world. What they think is cool is viewed by the public as tacky and obvious. For example, why do they insist on wearing white shirts and silk ties? Or what about gold watches, rings and chains? Who wears that stuff anymore? Don't they realize they are turning themselves into walking cliches? The only answer I came up with was that, as a salesman, I spent all my time with other salesmen. They were my friends. Believe it or not, I tried to fit in, to belong. So I began to develop an interest in gold ties, white shirts and dress shoes. I even grew a goatee because a lot of the guys had beards. And I put gel on my hair and combed it straight back.

Hey, that's my old look (minus the gel) ...

The general public doesn't think all that highly of high pressure salesmen, and that air of social disapproval will eat away at the crucial self-confidence of the salesmen. So, they tend to impose and Us vs. Them attitude on each other, hanging around after work with each other and with the kind of women who like high pressure salesmen. Moreover, the sales managers encourage their salesmen to go into debt to buy fancy cars, clothes, jewelry, houses, and the like, telling them they have to maintain a professional appearance and challenging their manhood if they don't think they can afford all that. That keeps them on the hook working at a job they may not really like but that makes them more money than they can make elsewhere.

I suspect when all the foreclosure statistics in the Sand States are toted up, we'll see that real estate agents, mortgage brokers, and other insiders got themselves in over their heads at a disproportionate rate. A similar dynamic was probably at work on Wall Street, just on a higher dollar scale.

16 comments:

silver said...

All right, physiognomy making a comeback!

About the care, think about, would you buy a mutual fund from someone that drives a Pinto?

Anonymous said...

"The general public doesn't think all that highly of high pressure salesmen, and that air of social disapproval will eat away at the crucial self-confidence of the salesmen. So, they tend to impose and Us vs. Them attitude on each other, hanging around after work with each other and with the kind of women who like high pressure salesmen. "

I still don't understand. Wouldn't a smart innovative guy dress like an ultra respectable man?

Anonymous said...

Wouldn't the simpler answer be, they just don't know that they look disreputable and shifty?

They don't know any respectable people so they don't know how respectable people dress? Respectable people do not influence them?

The general public doesn't think all that highly of high pressure salesmen, and that air of social disapproval will eat away at the crucial self-confidence of the salesmen. So, they tend to impose and Us vs. Them attitude on each other, hanging around after work with each other and with the kind of women who like high pressure salesmen.

ed said...

To make sure that the evaluators' prejudices did not skew the results, the researchers controlled for race, age, gender, obesity, attractiveness...

What an odd statement. I thought the idea was to test whether the evaluators "prejudices" contained valuable information, not to "eliminate" them.

I want to see the results when they DON'T control for all these things.

Mark said...

A black guy walks by you with an attitude and his pants down around his knees you know he's an honest family man. He's just trying to be ironic.

It's amazing how much money we give our schools so they can teach our kids to be stupid.

Mark said...

I wonder if they can break out the scores by "those who watch 'Law & Order'" and "those who don't." I'd bet dollars to donuts the latter group performs better.

Anonymous said...

The movie portrayal you want is the dad in 'Matilda'. Spectacular. dave.s.

Jun said...

Car salesmen -- and esp. used car salesmen -- are fascinating creatures, aren't they?!

You reminded me of an episode from one of Derren Brown's TV shows where he spots the lies some used car salesmen tell -- and even ones that they just think. Fun to watch!:

Derren Brown Trick or Treat - Car Salesmen

ironrailsironweights said...

Moreover, the sales managers encourage their salesmen to go into debt to buy fancy cars, clothes, jewelry, houses, and the like, telling them they have to maintain a professional appearance and challenging their manhood if they don't think they can afford all that.

Except for clothing to some extent, that doesn't really apply to car salesmen. Customers aren't going to know where a car salesman lives. Nor will they know what he drives, and in any event he may be using a dealership-provided car. As for clothing, the sort of things that a car salesman might wear on the job (white shirts, silk ties, etc.) aren't particularly expensive. It's not like they wear Brioni suits.

Peter

Anonymous said...

Facial angle ftw

David said...

the researchers controlled for [...] attractiveness

Beauty is in the eye of the beholder.

Toss this study in the circular file.

Anonymous said...

People usually think others who look like them are trustworthy. Everything else is going to be posture, grooming, and facial expression.

The other recently publicized face reading study basically called people with angry expressions "untrustworthy" and people with happy submissive expressions "trustworthy." The feminine-masculine spectrum accounted for whatever they labeled the second variable.

Maybe a more objective label for the first variable would be "cooperative" vs "uncooperative." The guy who hates your face isn't going to cooperate with you, and the guy who likes the cut of your jib might go out of his way to give you a helping hand. The same two guys might have opposite reactions to another person.

The person that might be an outgoing team player and even leader in one setting might be a morose outsider in another. You'd think that is obvious, but somehow people overlook it. Must be that faux "universality" thing. As if the universe cares about whether two upright primates cooperate or not.

sj071 said...

What about religious affiliations, kinship, cultural and tribal allegencies between lenders and borrowers? Was it ever discussed in the aforementioned study?

Compared to the US Government, a budding community entrerpreneur, say... Toni Soprano, would most likely establish a totaly different money lending policy with significantly better outcomes.

In purely financial terms, USGOV seems to be a very poor substitute for the real Mob.

anony-mouse said...

So how would you describe that new picture of Charlie Manson?

Anonymous said...

"So how would you describe that new picture of Charlie Manson?"

The most famous picture of Charles Manson has an asymmetrical eyebrow expression and beady eyes. He looks deranged, on drugs, or both. He does not look like an untrustworthy used car salesman; he looks like a homeless person. These face reading studies don't usually pick that kind of thing out.

Given the recent headlines, you would think people would wise up and wonder whether handsome well groomed white men in tailored suits are untrustworthy. Well, maybe they do: Mitt Romney lost the Republican nomination.

Nixon is a good example of a politician with an "untrustworthy" (gloomy, uncooperative - introvert?) look. The TV debate with fresh faced Kennedy was very bad for Nixon. Makes you wonder not whether another pol would have perpetrated Watergate, but whether they would have gotten away with it scot free.

That's a big theme in Scorsese's "The Departed." Fresh faced well groomed Matt Damon gets away with murder because he has the look. Reverence for that clean cut type is a big deal in Irish American culture, by the way. Probably some people like Scorsese resent that because the classic Italian face is almost the opposite of the classic Irish face in that sense.

Look at the difference in how the media treats Jewish looking Bernie Madoff versus WASPish looking Allen Stanford. Barely a mention of Stanford (not a peep in these parts), but New York magazine ran a photo of Madoff made up to look like an evil Joker.

By the way the recent British face reading study found that at-a-glance evaluations of faces did not match real behavior, and that baby faced "trustworthy" Matt Damon types are more dominant and aggressive in the real world.

David said...

Anonymous said

The guy who hates your face isn't going to cooperate with you, and the guy who likes the cut of your jib might go out of his way to give you a helping hand.[...] The person that might be an outgoing team player and even leader in one setting might be a morose outsider in another. You'd think that is obvious, but somehow people overlook it. Must be that faux "universality"

Ditto. Seen it a hundred times. Experienced it several times.

My moving from Jacksonville, Florida back to Knoxville, Tennessee to be among "my kind of people" improved my social standing and support network by a large factor. People who look like me are the "in's" here. In Jacksonville, we are the "out's." Lots of extended phenotypes (Svigor's term) in J-town.