I recently had the opportunity to watch "My Week with Marilyn", a wonderful film (nominated for 2 Oscars for acting, 6 BAFTAs- the British equivalent of the Oscars, and 2 Golden Globes, of which Michelle Williams won one for best actress in a comedy or musical).
One of the central plot points early in the film is the acting technique and style of Marilyn Monroe versus Sir Laurence Olivier. Marilyn is portrayed as a "method" actor in the classic sense. This means that she has to really understand and feel her character's motivations deeply in order to portray the character. If she doesn't understand the feelings behind the words, she literally can't complete the scene. Even small additions to a single line (e.g. "I like this room too" v. "I like this room") need to be motivated through character insight and underlying subtext.
Sir Laurence Olivier, meanwhile, is portrayed (and was well known to be) the exact opposite. For him, the technique of acting is all words, all the time. There is no necessity for underlying subtext, particularly in a light comedy. The words are central. For Sir Laurence, you say the line as written because that's how it was written. No other explanation is necessary. And more importantly, acting is pretending; it does not require realistic feeling, or any sort of emotion on the part of the actor—that's what makes it acting. (There is an apocryphal story of Olivier and Dustin Hoffman, a famous method actor, in which Dustin Hoffman showed up to the set of Marathon Man looking completely disheveled—in preparation for a scene in which he was exhausted and dirty, Hoffman didn't sleep or bathe. Olivier's reponse supposedly was "my good sir, why don't you just try acting".)
To this point, psychology hasn't looked at the technique of actors and which one audiences may prefer. Method actors often accuse non-Method actors of being "cold" and non-Method actors accuse Method actors of being "overwrought," but no research has been drawn to bear on this question. In one study conducted in my lab (which will be published as part of a chapter on the psychology of Acting on Film in a book on the Social Science of Cinema), I found that not only could American audience members not tell the difference between a scene acted by Method actors and the same scene by non-Method actors, but that they actually judged the non-Method actors as feeling more of the emotions of the characters! Of course, this is one study, and does not control for a very important factor: that as Americans, who have been "trained" as audience members to expect our actors to feel the emotions of their characters, perhaps when we prefer or think one performance is better, we automatically think that that actor must be feeling the emotions of his/her character.
There are other, important considerations to remember. First is the psychophysiological feedback that actors may be getting through playing their part. We've all heard of "fake it 'till you make it." As it turns out, there is a good reason to believe this to be true. When we fake a smile, there are actual physiological changes that occur which may cause an increase in good mood. Just by perceving ourselves as smiling (or frowning), happiness (or sadness) may increase. This is known as "self-perception theory". And, when we stand in "powerful" positions or "meek" positions for a few minutes, our bodies release hormones that actually make us feel more or less powerful! (See this wonderful research by Carney, Cuddy & Yap on "Power Posing".) So it may be that even if an actor does not think that feeling the emotions of a character is important or practical, it may happen anyway—just through psychophysiological feedback. Second, hardly any actor today is a "pure" Method or anti-Method actor. As seen in interviews, actors tend to pick and chose what works for them- taking a bit from each teacher, coach, director, etc, in order to create a way of creating a character that feels right and works for that portrayal, in that moment in time.
So who is right? Marilyn Monroe, or Sir Laurence Olivier? Do actors need to feel the emotions of their characters, and understand their character's deeper insights to portray them, or does all that emotion and subtext get in the way? And what does that mean for the rest of us, when we have to "portray" different selves in our daily lives? (Work self, home self, loving daughter self?) While research does not have the answer yet, we know that the self fulfilling prophecy of portrayed emotions or mental states can and does happen (as subtly as at a hormonal level), and that there have been wonderful and award winning actors from all sides of the acting theory debate- so perhaps it comes down to "what works for you".