Signaling Theory

Notes on signaling theory


Signaling status through the display of time-wasting pastimes is an interesting example that was raised by Veblen. He noted that displaying leisure is an important signal of status, of membership in the class of those who need not toil endlessly at some income-producing enterprise. Yet an abundance of leisure cannot be directly observed, for not very many people will watch you do nothing, day after day, year after year. Veblen proposed that the time-consuming acquisition of impractical accomplishments was a way of displaying leisure, and he listed among such accomplishments the ability to speak a dead language, knowledge of proper spelling, the occult sciences, and fashion and the breeding of fancy dogs (Veblen 1899). Someone with less financial resources would need to use much of their time in gainful employment; only someone with the leisure that comes with wealth would be able to display such accomplishments.

People are ingenious, and for most signals, there will be ways that someone, somehow, will find a way to fake a seemingly unfakeable signal. Unlike tigers, we can always find a way to stand on a box to seem taller, to bleach our hair to be blonder, to borrow an impressive car.

A winter tan is a costly signal of wealth and leisure: it is a signal that one has bountiful time and money, enough to vacation somewhere warm, sunny and far away. For a while, it was a fairly reliable signal. Then tanning parlors came along, and people with far less time and money could sport a winter tan4. Humans are inventors, and inventing cheaper and easier ways to signal a desirable quality โ€“ often in the absence of that quality โ€“ is a driving force behind much creative design.

See also this related post by Wray Herbert.

  1. Tiny Seal said:

    Nice articles.
    Wonder how Bush picture popped up randomly next to fakers paragraph ๐Ÿ™‚

  2. Unawoken said:

    I will do the meme thing when I get a chance.

    tiny seal,
    yeah I found that funny too, but it is easy to see the point ๐Ÿ™‚

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