City Research Online

Abstract

This article explores the important but understudied topic of authenticity in investment evaluations. Building on research in authenticity and signaling theory, we theorize how visual first impressions, such as clothing, can generate perceptions of authenticity that lead investors to overlook later quality signals, including a lack of prior experience. We found support for our theory in two field studies and a randomized experiment: investors tend to perceive entrepreneurs who are casually dressed as more authentic than those formally dressed, which is associated with higher investor evaluations. Moreover, perceptions of authenticity generated by casual clothes crowd out later signals: Casually dressed entrepreneurs are evaluated highly regardless of their entrepreneurial experience, but formally dressed entrepreneurs are penalized for perceived inexperience. We discuss the implications of our findings for authenticity research, the temporal order of signals, and early-stage investments.

Publication Type:	Article
Additional Information:	Reuse is restricted to non-commercial and no derivative uses. This article will be published in its final form in Journal of Management, available at: us.sagepub.com/en-us/nam/journal-of-management/journal201724
Publisher Keywords:	authenticity, signaling theory, first impression bias, clothes
Subjects:	H Social Sciences > H Social Sciences (General) H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management
Departments:	Bayes Business School Bayes Business School > Faculty of Management
SWORD Depositor:	Symplectic Administrator

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