The use of verbal precision : the impact of potential gain, potential loss, verification likelihood, and truthfulness

This study investigates key factors which determine the level of verbal precision that communicators use. Based upon two sources – Utility Theory and previous research – the study identifies four factors (Potential Gain, Potential Loss, Verification Likelihood, and Truthfulness) which potentially influence precision level. Communicators are hypothesized to use greater precision when they perceive greater Potential Gain, Potential Loss, or Verification Likelihood, or when they are telling the truth. In addition to these main effects, Truthfulness is hypothesized to interact with the other three independent variables. In order to test the hypotheses, 238 undergraduate business students from The University of Texas at Austin were recruited to participate in a full-factorial experiment. Participants assumed the role of a graduating senior who is taking part in a videoconference job interview. The entire experiment took place on a computer. Students viewed video-clips of the interviewer, who at multiple points asked a question and then waited for an answer. At each of these points, participants were offered three possible responses (each differing in precision). All four main-effect hypotheses were supported (i.e., Higher Potential Gain, Potential Loss, and Verification Likelihood, as well as Truthfulness led to higher precision). Truthfulness interacted with each of the other three IV’s, though in the case of Verification Likelihood it did so in the opposite direction from what had been hypothesized. Two contributions of the study are worth noting. First, the study demonstrates that the precision level a communicator uses can be understood within the framework of Utility Theory. Second, the study tests directly (for the first time) the relationship between precision and truthfulness. Precision level can be important in a large number of organizational activities (including performance appraisal, sales, and strategy formulation). It also can impact whether and how managers detect deception. For instance, by knowing when falsifiers use higher precision, a manager may be able to coax information from those who might be lying to them.