The Value of a Smile

61 Pages Posted: 8 Feb 2024 Last revised: 26 Mar 2024


This study examines the influence of perceived facial trustworthiness on investor behavior during initial coin offerings (ICOs), a context characterized by significant information asymmetry and a predominance of novice investors. To assess facial trustworthiness, I deploy machine learning algorithms and examine proxies for trustworthiness including smiling in publicly available images of ICO members. The results show a positive correlation between facial trustworthiness and investment, with the average capital raised differing by approximately $2.91 million (95%) between the top and bottom quintiles of ICOs ranked by trustworthiness. Notably, this perceived trustworthiness is unrelated to post-ICO performance, indicating a potential behavioral bias, specifically the halo effect, among investors. This bias is stronger (1) when there is poorer information disclosure, (2) for individual investors compared to institutional investors, and (3) for ICOs in low-trust countries. Such bias could partially explain investor behavior in the ICO and broader cryptocurrency markets.

Keywords: Initial coin offerings, facial trustworthiness, behavioral bias, cryptocurrency.

Suggested Citation

Mai, Sinh Thoi, The Value of a Smile. Available at SSRN: or

Sinh Thoi Mai (Contact Author)

Hanken School of Economics ( email )

PB 287
Helsinki, Vaasa 65101

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