Econlib broadcast on Signalling

Today I've been listening to an Econlib broadcast on Signalling

This is a very interesting discussion that explores the possibility that a great deal of our behavior arises out of mixed motives: partly, for direct economic reasons and partly for reasons of signalling to the rest of our community. The basis of the theory (as I understand it) is that a significant factor in our evolutionary history is our society and factions and our interactions with our group (tribe, or other small group). Factors such as predators, weather, etc were of less significance (or at least that signalling needs are of comparable significance in our evolutionary history). This leads to behaviors like dinner parties, ostentatious purchases of jewelry and BMW automobiles, etc, as well as much subtler behaviors.

Robin Hanson maintains that when we do things that don't seem to make total objective sense in straight economic terms, yet are common, we're seeing a proportionately greater influence of the signalling motives (which we often do unconsciously). Examples include things such as we seem to treat doctors very differently than we treat, for example, plumbers, because signalling becomes much more important during times of illness, and therefore our societies get set up in quirky ways that don't make strict economic sense. The example they give that comes to mind is that there's a common expectation that your mechanic will giving you back your old broken alternator (which he does in order to signal his trustworthiness), whereas we don't have a convention that the doctor is expected to wash his hands in front of the patient, even though we all know that handwashing among doctors has huge significance in the quality of our care. In fact, we don't even ask doctors if they've washed their hands. Other curiosities include that data are available on the track records of hospitals or doctors, but these data don't seem to be popular even though everyone professes that they want "the best".

Hanson says that this is because, in primitive societies, when a person was sick, signalling was very important, because it really told you who meant you well no matter your circumstances, and who was displaying lower "loyalty". Less loyal individuals would "dump you" because when you're sick is a good time to do that. So medicine in general is rife with signalling issues and expectations, and these bleed over into your relationship with your doctor (in a way that doesn't affect your relationship with your plumber).

The discussion ranges to things like the convention of bringing wine to a dinner party, choosing candies for valentine's day, parenting ("how cynical do you want your kids to be?"), schooling, skipping a funeral, wearing jeans to a ball, etc. It's very interesting and worth an hour and 10 minutes of your time. My favorite question is "why don't we treat our politicians like the waterproofer?" (the guy that wants to sell you a complex and expensive basement waterproofing system).


At one point, Russ Roberts, the host, says something along the lines of "I don't want that kind of a relationship with my wife". I found this to be kind of frustrating. I realize that, from an economic standpoint, when his wife invests in signalling to show she means well, it could be interpreted as less than totally honest, and wasteful, etc, and Russ Roberts obviously is reading these kinds of depressing meanings into this act. But my reaction was along the lines of "But, dude, she cares enough to work on signalling to you, even (especially) if she may not feel particularly romantic, etc at that moment." That's not dishonest, that's using an established tool to do an important job. I'm particularly surprised to hear this kind of objection from a married man, even I (a single man with demonstrably poor relationship skills) realize that there are things you just do in a relationship whether they "make sense" or not, just because she's a woman, and a human. Partly because that is less trouble than fighting the whole society we've ended up with. But it's also something very human. Both Roberts and Hanson don't seem to think it dishonest that we all, for instance, try to present ourselves as favorably as possible in a job interview or first date. And, as our relationships with people deepen and we understand each other, we do develop private conventions that wouldn't work with a stranger.

Perhaps I'm just a crappy economist because I value the human element more than I should. Or perhaps I'm just decieving myself because my subconsious wants to be able to do its signalling without my concious interference.