Tag Archives: Signaling

Talkative Sell, Silent Buy

By Robin Hanson · April 10, 2013 2:35 pm · Comments (14)

Me six years ago:

Every transaction has both a buyer and a seller. Yet we hear much more about salesmen, and how to sell, than we do about buyermen and how to buy. … Why? [Since] buyers are usually more uncertain about their value than sellers are about their cost, … whether a sale happens is more clearly a signal of seller ability than of buyer ability. … We like to see and affiliate with people who have impressive abilities associated with sales. (more)

Katja and I did another podcast recently, this time on advertising, and we talked a bit about how people seem to pay more attention to selling than to buying. Katja noted that we seem to give more attention to the signals we send, vs. interpreting the signals of others. For example, we think more about what we will wear than about the judgements we form based on what other people wear. We think a lot more what our charity says about us than about what we think about others based on their charity.

Someone at the talk last Thursday argued that they can’t be donating to look good, since they don’t tell anyone. And that reminded me of how terrified people are to speak in public. And that brought a unifying explanation to mind: we more often need to verbally justify the signals we send than how we interpret the signals of others. Let me explain.

For our distant forager ancestors, their most important public speaking probably happened in situations where they were being accused, and needed to defend themselves. Since the generic accusation behind any specific accusation was that one wasn’t doing enough overall for the band, and maybe should be exiled or killed, our ancestors should have been eager to collect examples of the help they have given, especially unheralded help. So we may have inherited a habit of doing helpful things, and not calling attention to them, but remembering them so we could mention them later if called on to defend ourselves.

More generally, our ancestors probably acquired the habit of consciously thinking about actions that others were likely to challenge or criticize. They’d continually come up with explanations of what they did and why, and be ready to tell those stories, even if they didn’t actually have to explain or justify most of them. And because they were rarely asked to justify or explain the judgements they made about others, they didn’t get into as much of a habit of explaining those.

This theory predicts that we in fact give just as much mental attention to buying as to selling, and just as much to interpreting signals as to sending signals, because these are in fact on average equally as important to us. But we give a lot more conscious attention to the side that needs to be explained, because that is what consciousness is about – consciousness helps much less to make decisions than to explain and justify them.

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Why Good Is Crazy

By Robin Hanson · March 20, 2013 1:45 pm · Comments (18)

My last post reminded me that the craziest beliefs ordinary folks endorse with a straight face are religious dogmas. And that seems an important clue to what situations break our minds. But to interpret this clue well, we need a sense for what is the key thing that “religions” have common. My last post suggested a hypothesis to me: compared to beliefs on who is dominant, impressive, or conformist, beliefs on who is “good” are the least connected to a constant reality. They and associated beliefs can thus be the most crazy.

Dominance is mostly about power via raw physical force and physical or legal resources. So it is relatively easy to discern, and we have strong incentives to avoid mistakes about it. And while prestige varies greatly by culture, the elements of prestige tend to be commonly impressive features. For example, the most popular sports vary by culture, but most sports show off a similar set of physical abilities. The most popular music genre varies by culture, but most music draws on a common set of musical abilities.

So while beliefs about the best sport or music may vary by culture, for the purpose of picking good mates or allies you can’t go too wrong by being impressed by whomever impresses folks from other cultures, and you have incentives not to make mistakes. For example, if you are mistakenly impressed by and mate with someone without real sport or music abilities, you who may end up with kids who lack those abilities, and fail to impress the next generation.

To discern who is a good conformist you do have to know something about the standards to which they conform. But if you want to associate with a conformist person, you can’t go too wrong by selecting people who are seen as conformist by their local culture. And if you mistakenly associate with someone who is less conformist than you thought, you may well suffer by being seen as non-conformist via your association with them.

Thus cultural variations in beliefs on dominance, prestige, or conformity are not huge obstacles to selecting and associating with people with desirable characteristics. That is to say, beliefs on such things tend to remain tied with strong personal incentives to important objective functional features of the world, ensuring they do not usually get very crazy.

Beliefs on goodness, however, are less tied to objective reality. Yes, beliefs on goodness can serve important functions for societies, encouraging people to do what benefits the society overall. The problem is that this isn’t functional in the same way for individuals. Each individual wants to seem to be good to others, to seem to praise others for being what is seen to be good, and to seem to approve when others praise others who seem to be good. But these are mostly pressures to go along with whatever the local cultures says is good, not to push for a concept of good that will in fact benefit society.

Thus concepts of what makes someone good are less tied to a constant reality than are concepts of what makes someone dominant, conformist, or prestigious. There may be weak slow group selection pressures that encourage cultures to see people as good who help that culture overall, but those pressures are much weaker than the pressures that encourage accurate assessment of who is dominant, conformist, or prestigious.

I suspect that our minds are built to notice that our concepts of goodness are less tied to reality, and so give such concepts more slack on that account. I also suspect that our minds also notice when other concepts are mainly tied to our concepts of goodness, and to similarly give them more slack.

For example, if you notice that your culture thinks people who act like Jesus are good, you will pay close attention to how Jesus was said to act, so you can act like that. But once you notice that the concept of Jesus mainly shows up connected to concepts of goodness, and is not much connected to more practical concepts like how to not crash your car, you will not think as critically about claims on the life or times of Jesus. After all, it doesn’t really matter to you if those are or could be true; what matters are the “morals” of the story of Jesus.

Today, a similar lack of attention to consistency or detail is probably associated with many aspects of things that are seen as good somewhat separately from if they are impressive or powerful. These may include what sorts of recycling or energy use is good for the planet, what sort of policies are good for the nation, what sort of music or art is good for your soul, and so on.

Since this analysis justified a lot of skepticism on concepts of and related to goodness, I am drawn toward a very cautious skeptical attitude in constructing and using such concepts. I want to start with the concepts where there is the least reason to doubt calling them good and well connected to reality, and want to try to go as far as I can with such concepts before adding in other less reliable concepts of good. It seems to me that giving people what they want is just about the least controversial element of good I can find, and thankfully economic analysis goes a remarkably long way with just that concept.

This analysis also suggests that, when doing policy analysis, one should spend as much time as possible doing neutral positive analysis of what is likely to happen if one does nothing, before proceeding to normative analysis of what actions would be best. This should help minimize the biases from our tendency toward wishful and good-based crazy thinking.

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Sleep Signaling

By Robin Hanson · March 12, 2013 9:00 am · Comments (25)

We sleep less well when we sleep together:

Our collective weariness is the subject of several new books, some by professionals who study sleep, others by amateurs who are short of it. David K. Randall’s “Dreamland: Adventures in the Strange Science of Sleep” belongs to the latter category. It’s a good book to pick up during a bout of insomnia. …

Research studies consistently find … that adults “sleep better when given their own bed.” One such study monitored couples over a span of several nights. Half of these nights they spent in one bed and the other half in separate rooms. When the subjects woke, they tended to say that they’d slept better when they’d been together. In fact, on average they’d spent thirty minutes more a night in the deeper stages of sleep when they were apart. (more)

In 2001, the National Sleep Foundation reported that 12% of American couples slept apart with that number rising to 23% in 2005. … Couples experience up to 50% more sleep disturbances when sleeping with their spouse. (more)

Why do we choose to sleep together, and claim that we sleep better that way, when in fact we sleep worse? This seems an obvious example of signaling aided by self-deception. It looks bad to your spouse to want to sleep apart. In the recent movie Hope Springs, sleeping apart is seen as a big sign of an unhealthy relation; most of us have internalized this association. So to be able to send the right sincere signal, we deceive ourselves into thinking we sleep better.

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Machiavelli On Listening

By Robin Hanson · January 18, 2013 8:45 pm · Comments (33)

In 1505, Machiavelli advised leaders to let a few trusted advisors tell them the truth when answering specific questions in private, but to never let anyone advise them in public, especially at those people’s own initiative:

There is no other way of guarding oneself from flatterers except letting men understand that to tell you the truth does not offend you; but when every one may tell you the truth, respect for you abates.

Therefore a wise prince ought to hold a third course by choosing the wise men in his state, and giving to them only the liberty of speaking the truth to him, and then only of those things of which he inquires, and of none others; but he ought to question them upon everything, and listen to their opinions, and afterwards form his own conclusions. With these councillors, separately and collectively, he ought to carry himself in such a way that each of them should know that, the more freely he shall speak, the more he shall be preferred; outside of these, he should listen to no one, pursue the thing resolved on, and be steadfast in his resolutions. He who does otherwise is either overthrown by flatterers, or is so often changed by varying opinions that he falls into contempt. (more)

Machiavelli was very smart and insightful on such subjects. So I’m reluctant to disagree with him. But his advice seems to tell leaders never to listen to prediction markets, and I’m not quite ready to give up on that idea yet. So what I want now is to better understand Machiavelli’s advice: why exactly should leaders not let themselves be seen as listening to public advice others initiate?

Some possible theories:

  1. Advice givers are higher status that advice receivers, and leaders must seek maximal status.
  2. There are standard embarrassing truths and audiences take one’s ability to keep people from voicing them as a costly signal of dominance.
  3. If people can influence you by telling you things, they will spend too much effort trying to do so, at the expense of other useful activities.
  4. What else?
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More signaling

By Katja Grace · December 30, 2012 4:31 am · Comments (6)

Centurion: Where is Brian of Nazareth?
Brian: You sanctimonious bastards!
Centurion: I have an order for his release!
Brian: You stupid bastards!
Mr. Cheeky: Uh, I’m Brian of Nazareth.
Brian: What?
Mr. Cheeky: Yeah, I – I – I’m Brian of Nazareth.
Centurion: Take him down!
Brian: I’m Brian of Nazareth!
Victim #1: Eh, I’m Brian!
Mr. Big Nose: I’m Brian!
Victim #2: Look, I’m Brian!
Brian: I’m Brian!
Victims: I’m Brian!
Gregory: I’m Brian, and so’s my wife!

- Monty Python’s Life of Brian

It’s easy for everyone to claim to be Brian. What Brian (and those who wish to identify him) need is a costly signal: an action that’s only worth doing if you are Brian, given that anyone who does the act will be released. In Brian’s life-or-death situation it is pretty hard to arrange such a thing. But in many other situations, costly signals can be found. An unprotected posture can be a costly signal of confidence in your own fighting ability, if this handicap is small for a competent fighter but dangerous for a bad fighter. College can act as a costly signal of diligence, if lazy, disorganized people who don’t care for the future would find attending college too big a cost for the improved job prospects.

A situation requires costly signaling when one party wishes to treat two types of people differently, but both types of people want to be treated in the better way. An analogous way to think of this as a game is that Nature decides between A or -A, then the sender looks at Nature’s choice, and gives a signal to the receiver, B or -B. Then the receiver takes an action, C or -C. The sender always wants the receiver to do C, but the receiver wants to do C if A and -C if -A. To stop the sender from lying, you can modify the costs to the sender of B and -B.

Suppose instead that the sender and the receiver perfectly agreed: either both wanted C always, or both wanted C if A and -C if -A. Then the players can communicate perfectly well even if all of the signals are costless – the sender has every reason to tell the receiver the truth.

If players can have these two kinds of preferences, and you have two players, these are the two kinds of signaling equilibria you can have (if the receiver always wants C, then he doesn’t listen to signals anyway).

Most of the communication in society involves far more than two players. But you might suppose it can be basically decomposed into two player games. That is, if two players who talk to each other both want C iff A, you might suppose they can communicate costlessly, regardless of who the first got the message from and where the message goes to. If the first one always wants C, you might expect costly signaling. If the second does, you might expect the message to be unable to pass that part in the chain. This modularity is important, because we mostly want to model little bits of big communication networks using simple models.

Surprisingly, this is not how signaling pairs fit together. To see this, consider the simplest more complicated case: a string of three players, playing Chinese Whispers. Nature chooses, the sender sees and tells an intermediary, who tells a receiver, who acts. Suppose the sender and the intermediary both always want C, while the receiver wants to act appropriately to Nature’s choice. By the above modular thesis, there will be a signaling equilibrium where the first two players talk honestly for free, and the second and third use costly signals between them.

Suppose everyone is following this strategy: the sender tells the intermediary whatever she sees, and the intermediary also tells the receiver honestly, because when he would like to lie the signal to do so is too expensive. Suppose you are the sender, and looking at Nature you see -A. You know that the other players follow the above strategy. So if you tell the intermediary -A, he will transmit this to the receiver, though he would rather not modulo signal prices. And that’s too bad for you, because you want C.

Suppose instead you lie and say A. Then the intermediary will pay the cost to send this message to the receiver, since he assumes you too are following the above set of strategies. Then the receiver will do what you want: C. So of course you lie to the intermediary, and send the message you want with all the signaling costs of doing so accruing to the intermediary. Your values were aligned with his before taking into account signaling costs, but now they are so out of line you can’t talk to each other at all. Given that you behave this way, he will quickly stop listening to you. There is no signaling equilibrium here.

In fact to get the sender to communicate honestly with the intermediary, you need the signals between the sender and the intermediary to be costly too. Just as costly as the ones between the intermediary and the receiver, assuming the other payoffs involved are the same for each of them. So if you add an honest signaling game before a costly signaling game, you get something that looks like two costly signaling games.

For example, take a simple model where scientists observe results, and tell journalists, who tell the public. The scientist and the journalist might want the public to be excited regardless of the results, whereas the public might want to keep their excitement for exciting results. In order for journalists who have exciting news to communicate it to the public, they need to find a way of sending signals that can’t be cheaply imitated by the unlucky journalists. However now that the journalists are effectively honest, scientists have reason to misrepresent results to them. So before information can pass through the whole chain, the scientists need to use costly signals too.

If you have an arbitrarily long chain of people talking to each other in this way, with any combination of these two payoff functions among the intermediaries, everyone who starts off always wanting C must face costly signals, of the same size as if they were in an isolated two player signaling game. Everyone who wants C iff A can communicate for free. It doesn’t matter whether communicating pairs are cooperative or not, before signaling costs. So for instance a whole string of people who apparently agree with one another can end up using costly signals to communicate because the very last one talks to someone who will act according to the state of the world.

So such things are not modular in the way you might first expect, though they are easily predicted by other simple rules. I’m not sure what happens in more complicated networks than strings. The aforementioned results might influence how networks form, since in practice it should be effectively cheaper overall to direct information through smaller numbers of people with the wrong type of payoffs. Anyway, this is something I’ve been working on lately. More here.

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Marginal Charity

By Robin Hanson · November 24, 2012 10:00 am · Comments (114)

People often ask: where can I get the best bang for my buck in charity? The above diagram shows where.

We make many choices, both as individuals and as organizations; we choose prices, qualities, locations, etc. We often make such choices to maximize some sort of private gain, shown in red. Such private choices also usually have effects on the gain of the rest of the world, shown in black. In general the social gain curve peaks at a different point than the private gain curve, because there are usually many market failures associated with our choices. (As the absolute curve heights are irrelevant, I’ve arbitrarily let them intersect where private gain peaks.)

At the choice that maximizes private value, a small change in the direction of raising social gain, as shown by the yellow arrow, comes at only a tiny loss in private gain. In fact, in the limit of going to the exact private gain maximizing choice, the ratio of the rates of change of social gain and private loss approaches infinity!

The lesson: if you aren’t already doing it, by far the most cost-effective way to help the world is to shade your selfish choices just a little in the direction of making the world a better place. If you have market power when you sell a product, lower your price just a tad. If you have market power when you sell your labor, lower your wage a bit. Instead of choosing the profit-maximizing quality for your product or labor, increase that quality a little. If twenty floors would be the most profitable height for your apartment complex, add one more floor. And so on. (And maybe learn some econ, so you can better see which direction is good.)

Yes, you usually aren’t sure what is your best selfish choice; your choice might already be accidentally helping the world at a bigger personal cost than you intended. But you might also be accidentally hurting both you and the world. If you are now doing your best guess way to help yourself, shift just a bit toward helping the world; on average that will cost you very little and give the world a lot.

Yes it is harder to pay others to take this approach. If you tried to pay an apartment builder to add one floor beyond the twenty they’d otherwise build, they’ll probably quickly learn to lie and say that nineteen floors is what maximizes their profits. So this approach tends to be limited to choices where you are the insider who knows the internal best estimates, or where you trust an insider not to lie to you. Still, most of us make selfish choices all the time, so we should all have lots of opportunities to apply this method.

If this is such an easy way to help the world, why haven’t you heard about it before? Why isn’t this a standard part of everyone’s education? I’d guess it is because it is hard to show that you are helping the world via this method. And people care a lot more about seeming to help, than about actually helping. Also, even if this could be made visible, we are usually much more eager to show we’ve paid a high cost than to show we’ve achieved a big social gain; it is the cost that makes for a credible costly signal of our virtue. Finally, this can’t be the basis of an inspiring hero story; it is something that many folks can each do a little, not something that one person can do a lot.

(I doubt I’m original here; this point seems pretty obvious given basic optimization theory. But I didn’t see anywhere else I could link to that makes this point.)

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Brands Show Identity

By Robin Hanson · November 9, 2012 8:15 am · Comments (21)

Marketers have long noticed puzzlingly high levels of brand loyalty:

Consumers appear to have high willingness to pay for particular brands, even when the alternatives are objectively similar. The majority of consumers typically buy a single brand of beer, cola, or margarine, even though relative prices vary significantly over time, and consumers often cannot distinguish their preferred brand in blind “taste tests”. Consumers pay large premia to buy homogeneous goods like books and CDs from branded online retailers, even when they are using a “shopbot” that eliminates search costs. A large fraction of consumers buy branded medications, even though chemically equivalent generic substitutes are available at the same stores for much lower prices.

Brand loyalty is big barrier to innovation, and an important reason why inefficient firms manage to survive so long.

Brand preferences create large entry barriers and durable advantages for incumbent firms, and can explain persistence of early-mover advantage over long periods

In the latest American Economic Review Bronnenberg, Dube, & Gentzkow offer new clues:

Variation in where consumers have lived in the past allows us to isolate the causal effect of past experiences on current purchases, holding constant contemporaneous supply-side factors such as availability, prices, and advertising. … 60 percent of the gap in purchases between the origin and destination state closes immediately when a consumer moves. … The remaining 40 percent gap between recent migrants and lifetime residents closes steadily, but slowly. It takes more than 20 years for half of the gap to close, and even 50 years after moving the gap remains statistically significant. … The relative importance of brand capital is higher in [product] categories with high levels of advertising and high levels of social visibility. (more)

This ad effect is puzzling because:

Large literatures have measured the effects of advertising, but these studies often find no effects [of ads on sales], and the effects they do measure are estimated to dissipate over a horizon ranging from a few weeks to at most five or six months.

Let me suggest that an important use of brands is to create and signal identities. We create a coherent understandable idea of the kind of person we are, integrated with the kind of products we use, and we prefer not to change that concept, so that others can continue to rely on their expectations about us. We are willing to pay higher prices, and neglect info about quality, in order to keep a persistent style and appearance. So brands are naturally more important for products we use that others see more, and where ads have made connections to identity more salient.

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Is Paper Low Status?

By Robin Hanson · November 6, 2012 4:00 pm · Comments (48)

“Virginia has a lot of electronic voting and in general has an election system where it’s very hard to get recounts,” says Dill. “So I might worry about Virginia, depending on how close it is.” … It’s a lot easier to modify electronic records than to modify paper records which is why banking and a lot of other critical activities like that still rely on paper when there’s an ultimate disaster and electronic records are lost or corrupted. (more)

When I voted this morning in Virginia I noticed a line of 6-8 people waiting to use the electronic voting machines, but one could vote immediately on paper. Yet paper voting is less corruptible. I asked Alex Tabarrok and he said he puzzled over the same thing when he voted: why is paper voting so unpopular?

A fb comment noted that it is mostly old folks voting on paper. And that was true at my place as well. Which leads me to suggest that this is a status effect – people stand in line to vote less securely in order to signal that they aren’t old folks scared by or incompetent at electronics. Yes, it seems surprising that people are willing to spend an extra few minutes just to look hip to strangers. But what other explanation is there?

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Why Admire Brags?

By Robin Hanson · September 27, 2012 11:30 pm · Comments (7)

A few days ago Rob Wiblin complained about our admiration of anonymous charity:

Even those who are open about their good deeds are likely to hold a special admiration for anyone they discover has been secretly helping others for years. … This norm exists because when you go on about your altruism, … perhaps you made that donation just to be able to show off your virtue and wealth to everyone else. … [But] a culture of ‘private altruism’ has some seriously perverse effects. … We are less inclined to talk about … which causes are most valuable. .. Altruistic acts … will tend to be crowded out by alternatives that are unavoidably conspicuous – impressive cars, holidays, degrees and so forth. … Someone who really cared about helping others … would want to bring up the fact whenever they could get away with it, in order to draw attention to the merits of their cause and prompt others to join in. (more)

Charity has an overt and a covert purpose. The overt purpose is to help those who can’t trade to get the help they need. To understand the covert purpose, let’s review some basics about showing that we care.

Your associates care about how helpful you are to them. Sometimes they can see very clearly how helpful you are. For example, they might see you hold a door open, or answer a direct question. But most of the time their vision is obscured. So they have to look for clues in what they can see, to infer things unseen. For example, if they see you helping a similar associate in a situation where that associate can’t see the help, they might guess that you help them in similar situations where they can’t see. Conversely if they see you make fun of someone not in the room, they might wonder if you do the same to them when they are absent.

If they see you helping someone in need who can’t much help you back, they might guess that you would similarly help them if they were in similar need, but couldn’t help you back. And if they see you helping someone in a situation where you might reasonably guess that no one could see your help, they might think you would help them in a situation where you’d guess no one could see. There is thus a close functional association, and complementarity, between charity, helping people who can’t help you back much, and anonymity, helping when the recipient and others can’t see the help.

Given this complementarity between charity and anonymity, for the purpose of signaling, it makes sense that people recommend giving anonymously, and admire folks who do so. Sure, that may end up less helping distant others in need, but we all know that we don’t care much about that.

Imagine that after one person told another “I love your new dress, it makes you look thin,” you shouted “Liar. I know you don’t like dresses like that, and anyone can see this dress doesn’t maker her look thin.” Do you think either of them would appreciate your comment? They probably both know the speaker exaggerates, but still appreciate the exchange as a signal of friendship and loyalty. You are rudely insulting them both, because they did something they admire.

You’ll seem similarly tone deaf if you point out that charity givers are not giving in ways to maximally benefit recipients. The giver and the audience both admire the gift as a signal of loyalty and caring, which they see as good things, and in addition a third party benefits from the process. Yet there you are complaining that they aren’t doing even more. They can quite reasonably see you as rude, hostile, and ungrateful. Who made you the spokesperson for the recipients of their charity? Don’t you see how white lies smooth the social fabric?

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Rude research

By Katja Grace · September 27, 2012 6:00 am · Comments (32)

Bryan Caplan says intelligence research is very unpopular because it looks so bad to call half of people stupider than average, let alone stupid outright. Calling people stupid is rude.

But if this is the main thing going on, many other kinds of research should be similarly hated. It’s rude to call people lazy, ugly bastards whose mothers wouldn’t love them. Yet there is little hostility regarding research into conscientiousness, physical attractiveness, parental marriage status, or personal relationships. At least as far as I can tell. Is there? Or what else is going on with intelligence?

 

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