Tag Archives: Signaling

My Freak On Again

By Robin Hanson · July 10, 2011 11:00 pm · Comments (7)

A few weeks ago I posted on appearing at the end of a Freakonomics radio show on “The Folly Of Prediction.”  I now appear at the end of another Freakonomics radio show, this one on “Hey Baby, Is That a Prius You’re Driving?”, i.e., on signaling:

Managing our appearance is actually a lot of what we humans do. Trying to understand, business, trying to understand jobs, school, even medicine. If you don’t realize that people are trying to manage their image, you miss out on a lot of what’s going on.

I elaborate on how we economists signal:

Economists like to point out there’s almost no chance that your vote is going to determine an election. So one of the things an economists like to do to show off that they’re clever economists is to not vote and to say to everybody, hey I’m smarter than all the rest of you!  See, I understand that by voting, it’s not going to make any difference, anyway. And we do a little of that too often. Say, you might not tip at a restaurant because you say, you know I’m never come back to this restaurant again.  And so economists often think like that, they think through the strategy and they go out of their way of maybe being rude or a little thoughtless, in usual language, in order to show, hey I understand the strategy of this. I’ve got to admit, I do that sometimes. I tip at restaurants, I’ll tell you that, but still—

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Grace-Hanson Podcasts

By Robin Hanson · July 10, 2011 2:00 pm · Comments (10)

Katja Grace was in town recently, so she and I took the opportunity to start an occasional podcast series. Here are the first two episodes:

  1. Signaling
  2. Idealism

Alas we recorded the second one outside, with odd distracting noises, perhaps the wind.

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School Signal Investing

By Robin Hanson · July 9, 2011 8:20 pm · Comments (36)

Tyler Cowen and Bryan Caplan have been arguing about the signaling theory of education. Bryan’s latest is here, Tyler’s here. Tyler cites two recent empirical papers which estimate that “signaling accounts for one-third of the educational wage premium.” Such papers generally try to predict later income as a function of schooling years and quality, plus other covariates. Today I want point out two bits of “armchair econ” data that complicate such discussions.

Datum #1: Pretty much no one cared about the grades I got before tenth grade.

As long as my grades weren’t very low, I was consistently promoted to the next level. If I got into special classes for gifted students, that was based on IQ tests, not grades. Colleges later cared about my high school GPA, but not about any earlier GPAs. So since no one was watching my earlier grades, they couldn’t possibly be signals right?

Not so fast. Assume for the sake of argument that employers want high GPA grads of good colleges entirely for signaling reasons – students never learn anything useful for future jobs, but merely show innate abilities. But also assume that it takes years of training and effort for kids with high innate ability to learn to do well in school. Given these assumptions third grade schooling is entirely an investment in a signal to later show employers. GPAs then only help kids see how well they are learning school stuff, which will later help them send a good signal. So even though no signaling is happening in third grade, everything third grade students do might be an investment in later signals.

Datum #2: When I visit private firms, people there often mention the prestigious degrees they have.

Yes, they may do this more often for academic visitors, but the point remains. Firms want to impress customers, suppliers, investors, etc. with the quality of their employees, and hiring graduates from prestigious schools helps them signal such quality. Hiring such graduates can also help a manager to impress his bosses, potential employees, and sister divisions about the quality of his employees. Thus even once a boss has determined the “real” productivity of his or her employer, he or she should still be willing to pay extra for employees with prestigious degrees.

Furthermore, people in business signal to each other all the time. In fact, most of the on-the-job business learning that employees do after college, such as how to dress well, how to give presentations, how to write memos, how to talk with clients, etc. might be skills that are mainly useful to signal innate features to bosses, co-workers, clients, etc. So employers might pay more for students with prestigious degrees because such degrees show an ability to learn how to later send good business signals. And this extra pay for top degrees could be entirely an investment in signaling, even if after hiring someone no one ever knew of or mentioned their degrees, and even if schooling makes students better able to please employers.

Bottom line: If much of human interaction is signaling, then much of human investment is in ways to better signal. Businesses that signal are also willing to invest in better signals. The fact that attending school seem to cause changes in students that employers are willing to pay for does not show that school isn’t all about signaling.

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Why Non-Profits?

By Robin Hanson · July 6, 2011 11:50 am · Comments (39)

Arnold Kling questioned the value of non-profits:

A profit-seeking enterprise is more accountable, in that a profit-seeking business must satisfy consumers or else go out of business. Hence, it must provide something of value to its customers. On the other hand, if a non-profit fails to provide any benefit to its customers, it still might be able to obtain grants from the government or from donors.

Fabio Rojas responded:

Non-profits provide services that are not sustainable in a for-profit format. … The customers simply can’t pay for what might benefit them and “we” (the donors) have decided that these people need the service. The non-profit format is a way to handle donations to third parties in an organized and semi-public fashion. … Examples include services to poor children (e.g., Boys and Girls Clubs), women (e.g., battered women’s shelters) and immigrants (e.g., many religious groups donate time and services to poor immigrants). My intuition is that it would be hard for a profit oriented institution to help battered women or poor children. …

It’s signaling. Not only in the Hanson “I do this because I care” sense, but as a commitment to a specific issue. The people who run the local church organization for recent Mexican migrants have to show that they won’t bail in order to give shareholders a slightly higher return. Rather, by making their organization non-profit, they show an allegiance to a specific type of person, not their wallet.

Fabio suggests that the main function of non-profits is as intermediaries between those who want to donate and the deserving recipients they want to help. But the obvious question here is: why can’t non-profits give these deserving recipients vouchers for service at for-profit firms? Why do non-profits need to provide the services themselves? Remember that 51% of non-profit revenue goes to medical orgs like hospitals, and 14% to schools — vouchers are quite feasible for both of these kinds of services.

Admittedly, in some cases there are strong complementarities between the task of deciding who is a deserving recipient and actually providing services. This applies, for example, to service coordinators such as social workers, who evaluate aid candidates and suggest relevant services to them. But why must the services that coordinators coordinate be provided by non-profits?

Now there might be good reasons for customers to sometimes choose non-profit service providers. Such a choice might assure customers that advice being given is not overly influenced by profit motives. But this reason should apply to many sorts of customers all across the economy – there is no obvious reason to expect a correlation between people donors consider deserving of help and people who buy trustworthiness by buying from non-profits.

So why don’t the non-profits that donors use to distribute help usually give vouchers to recipients, vouchers valid at either non-profit or for-profit service providers? Once one has decided who needs what sort of help, why does it matter what kind or organizations provide that help?

I suspect that what is going on here is that non-profit donors and employees both dislike the idea of letting money to go for-profit firms, regardless of how much that might benefit aid recipients. They affiliate with non-profits in order to gain an image of “doing good” and substantial affiliations with for-profits in that process taints that image.

Added 5p: Several commenters pointed out that many prefer to volunteer time, and without money mediating between their time donation and the cause. That is, they don’t just want to work at whatever makes the most money and have that money used for the cause – they want to personally spend their time on the cause. This also seems to fit my basic theory – that the more money and profit are involved in the process, the more that taints the do-gooding image of their donation.

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The Great “Charity” Storm

By Robin Hanson · July 5, 2011 8:30 pm · Comments (16)

Around 1800 in England and Russia, the three main do-gooder activities were medicine, school, and alms (= food/shelter for the weak, such as the old or crippled). Today the three spending categories of medicine, school, and alms make up ~40% of US GDP, a far larger fraction than in 1800. Why the vast increase?

My explanation: we long ago evolved strong feelings of respect for these activities, but modern context changes have allowed out-of-equilibrium exploitation of such feelings. Details:

1. Foragers who personally taught kids, cared for sick folks, and gave food/shelter to weak folks, credibly signaled their loyalty to allies, at least when such needy were allies. Weak group selection helped encourage such aid as ways to signal loyalty, in place of other possible loyalty signals. Humans eventually evolved deep feelings of respect for such activities.

2. Farmers inherited such feelings, and thus also gave social credit to those who donated money instead of time to promote these three classic charities. Rich farmer elites felt this more strongly, as they had more forager style attitudes. As such donations were less observable than forager help, farmer donors had weaker incentives to help. Also, the indirection often resulted in money being spend badly.

3. Industry era folk also inherited such feelings, strengthened by wealth. Voters today get social credit for supporting tax-funded activities that look similar to the three classic charities: medicine, school, alms — even though one can fake such signals without having the loyalty that such signals are seen as showing. That is, votes supporting spending taxes on medicine, school and alms are interpreted as showing loyal “caring” for one’s community, even though most of this spending is on typical voters, not those in special need, and even though one person’s vote doesn’t change outcomes. And even if a vote did change outcomes, paying via taxes doesn’t sacrifice personal income relative to local rivals, making this signal mostly “cheap talk.” Indirection continues to hurt effectiveness. All this creates a perfect storm of vast voter support for tax-funded medicine, school, and alms. So we can all feel fantastic about how caring we all are. Yeah us.

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Promises Signal

By Robin Hanson · June 6, 2011 10:55 am · Comments (5)

Promises can both 1) help others predict and rely on our future behavior, and 2) signal our current feelings to others. The signaling function seems to dominate:

People who had the most positive relationship feelings and who were most motivated to be responsive to the partner’s needs made bigger promises than did other people but were not any better at keeping them. Instead, promisers’ self-regulation skills, such as trait conscientiousness, predicted the extent to which promises were kept or broken. … Participants who were [caused to] focused on their feelings for their partner promised more, whereas participants who generated a plan of self-regulation followed through more on their promises. …

When people make promises to address a point of contention with their partner, they seem to get swept up in what they want to do for their partner. A promise situation might appear as an opportunity to be responsive to a partner’s needs and demonstrate the loving feelings they experience for the other person, and it is these feelings they are thinking of when they make promises. … If promised behaviors can be completed immediately after promising rather than be sustained over a longer period of time, then the link between positive relationship feelings and extent of followthrough reemerges. (more)

If relationship promises mainly function to signal our current feelings, that makes it more plausible that paying and pushing for medicine for our associates serves a similar function of showing that we care. We humans apparently do relatively little checking later of whether promises were kept, or if medicine helped.

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Consider Conspiracies

By Robin Hanson · April 30, 2011 5:30 am · Comments (21)

New research suggests people are more likely to endorse conspiracy theories if they would be willing to personally participate in such a conspiracy. … “At least among some samples and for some conspiracy theories, the perception that ‘they did it’ is fueled by the perception that ‘I would do it. … People who have more lax personal morality may endorse conspiracy theories to a greater extent because they are, on average, more willing to participate in the conspiracies themselves.” (more; HT David Brin)

All the commentary I’ve found on this seems to take it as evidence against conspiracy theories, since it offers a non-evidential explanation for why people might believe in such theories. For example, people are eager to mention birthers in the same breath, to discredit them. But in fact this result tends to support conspiracy theories.

Think about it. Why are conspiracy theories in such disrepute, given that there have in fact been many real conspiracies in the world? One theory is that conspiracy theories just tend to be wrong – that there is some bias which makes people believe them too much, and the anti-conspiracy attitudes you see are a response to that bias. Another theory is that the people who tend to support conspiracy theories are disliked, independently of the evidence supporting their theories. The result above adds support for this disliked theory, relative to the bias theory.  And this gives you less reason to believe there is in fact a widespread bias to believe too easily in conspiracy theories. Which is evidential, if not social, support for such theories.

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Against IRBs

By Robin Hanson · March 19, 2011 11:40 pm · Comments (34)

Once upon a time some researchers gave people diseases and prevented their treatment without those folks’ consent or knowledge. Other researchers let volunteers think that they were torturing folks. This so horrified many that they created a system of regulation where any academic “experiments” must have prior approval by an Institutional Review Board (IRB). And that system has expanded to the point of requiring prior approval for any interaction between researchers and non-researchers intended to be the basis of an academic publication.

That is, researchers seeking publication can’t talk to people (e.g., survey), or buy or sell something with them, or even pay them to do trivial tasks like correcting spelling mistakes, without first writing out a detailed plan months in advance and getting that approved by a committee of other academics.

One common rule is “informed consent” – people must be informed in great detail of the consequences of their interacting with the researchers – researchers must tell much more than ordinary people must tell when they deal with others. A second common rule is that people must benefit in some other way than money – they must gain some sort of intellectual insight or learning. A third common rule is that no record can be kept of people’s identities unless a really strong reason is offered to the contrary.

IRBs seem a good example of concern signaling leading to over-reaction and over-regulation. It might make sense to have extra regulations on certain kinds of interactions, such as giving people diseases on purpose or having them torture others. But it makes little sense to have extra regulation on researchers just because they are researchers. That mainly gets in the way of innovation, of which we already have too little.

Notice that researchers continue to be allowed to publish their results, and give lectures and media interviews, without such prior approval. Yet couldn’t ordinary people be harmed by reading articles that induce them to have unethical or unpleasant beliefs?  Of course they could – it is only an accident of history that regulation does not also require prior ethical review of publications.

Added noon:

In the United States, IRBs are governed by … provisions of the National Research Act of 1974, for example defining IRBs and requiring them for all research that receives support, directly or indirectly, from … the Department of Health and Human Services. (more)

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Choose: Help Or Show Concern

By Robin Hanson · March 15, 2011 10:00 am · Comments (56)

The Post has now given more media attention to damaged Japan nuke plants than to the entire rest of the earthquake, tsunami, etc. event.  I suspect lots of media worldwide act similarly. Yet, the tsunami was vastly more harmful. As MIT’s Josef Oehmen explains, there is very little chance that many will suffer much radiation harm.

There was and will not be any significant release of radioactivity from the damaged Japanese reactors. By “significant” I mean a level of radiation of more than what you would receive on – say – a long distance flight, or drinking a glass of beer that comes from certain areas with high levels of natural background radiation.

In fact, the nuke media scare will itself cause far more harm!

Although radiation escaping from a nuclear power plant catastrophe can increase the risk of many cancers and other health problems, stress, anxiety and fear ended up in many ways being much greater long-term threats to health and well-being after Chernobyl, Three Mile Island and other nuclear accidents, experts said Monday.

“The psychological effects were the biggest health effects of all — by far.” … “After almost every radiological emergency, anyone or anything seen as or perceived as associated with the emergency came to be seen by others as tainted or something to be feared and even the object of discrimination.” … [After] a much less severe nuclear accident in 1999 in Tokaimura, Japan, … people in other parts of Japan refused to buy products from that region, and travelers were turned away from hotels and asked not to use public baths and swimming pools. … Studies of more than 80,000 survivors of the Hiroshima and Nagasaki blasts have found that … only about 500 [cancer] cases could be attributed to the radiation exposure the people experienced. (more)

Now the media nuke emphasis does make business sense, since most ordinary folks I know seem quite eager to show each other their deep concern about those nuke plants. What sort of heartless person would not furrow their brow and express worry about those folks at risk? Some say this just shows nuke plants should not be built in earthquake zones.

Here is yet another example of where people tend to choose showing concern over actually helping. Shrugging your shoulders and saying this is no big deal, that would help. Loudly expressing deep “concern,” on the other hand, hurts.

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Hail Julie Henderson

By Robin Hanson · February 23, 2011 4:40 pm · Comments (71)

Top 10 Ways Sports Illustrated Disrespects Women … The swimsuit issue features women models posed not as athletes of strength, skill, and endurance but as playthings; … showing women’s primary value to be their value as sex objects; … bodies as if they are merely body parts; … encouraging … to view women as sex toys … to ogle at; … numbing men to women’s humanity; … exhibiting women to men as the “other”; … sending a message to girls … that … all that matters is how they look to men. (more)

After reading that, I browsed the free videos at Sports Illustrated and — I liked them a lot. More even than their for-pay magazine pictures. I especially liked Julie Henderson, presented like a “flower child” from my generation’s youth (best in full screen):

This sort of thing isn’t easy to do well, requiring skill in composition, photography, makeup, costumes, etc. Hats off to the whole team, including Julie.

Of course I didn’t just admire production skills – I enjoyed the vid, in part because it made me feel attracted to Julie and helped me fantasize that she likes me back. And yes, that includes some sexual attraction.

But most everything that humans do to impress each other has a sexual component. Women are more attracted to men who do music, sport, art, politics, and even research well, and men do such things more as a result. Also, standard displays rarely give equal weight to all of a person’s aspects. A sport performance emphasizes different aspects than a poetry reading or a rock concert, and none give a whole view of the performer.

Yes a swimsuit video has sexual connotations and doesn’t emphasize all aspects of the performer, but then the same can be said of many rock concerts. Why do folks complain so much more about swimsuit vids? Some possibilities:

  1. Since common folks like swimsuits, liking them doesn’t signal elite class or culture.
  2. It takes fewer special skill to appreciate swimsuits, making it hard to signal discernment this way.
  3. For most other displays with sexual connotations, one can more easily pretend to be interested for other reasons. Homo hypocritus prefers ambiguous sex displays in public.
  4. Swimsuits are more salient to men seeking short term mates, and women seeking long term mates fear short term mates in disguise. To present themselves as seeking long term mates, both men and women disapprove of swimsuits.
  5. We prefer displays that emphasize effort over innate ability. and presume swimsuits mostly show off innate ability.
  6. [Added] For other displays we can more easily self-deceive to think that our displays are just as good.
  7. What else?
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