Wednesday, July 30, 2008

Is "Costly Signal" Such an Obscure Concept?

I'm finishing an article for the Chronicle of Higher Education, on recruiting upper level administrators at universities. (It should be out August 18, and I'll post it).

One of the editors had questions about a section where I touted "costly signals" as being a useful way to commit. The context was trying to get folks to come to campus for a final visit. I proposed that the Provost, not the headhuntrix employed by the Provost, make the call. Because "costly signals make the world go round."

And....I got the question: What in the world are "costly signals"?

Is it that obscure a concept?

Male peacock tails: wastes energy, makes the birds vulnerable to predators. But, chicks dig it. Because only a healthy male peacock can maintain that huge tail and not get caught by a fox.

Psychologists use "costly signal" theory to explain human social customs. Say a couple has been dating for a while, have not been intimate. Valentine's day rolls around.

If the guy buys the woman nothing, she is upset. "He doesn't love me." They don't go upstairs and get busy.

If the guy buys her chocolates, a card, and flowers, "He DOES love me!" Getting busy is a real possibility, either upstairs or they may end up staying downstairs and using the couch.

Here's the point, though: Suppose the guy had given the woman MONEY, cash equal in
value to the chocolates and flowers. That would be a crude insult, treating her like a prostitute.

She would throw the cash in his face, and tells him to get out, and take his stupid "764-Hero" CDs with him. (She hates emo, but didn't want to tell him).

You have to WASTE the money for it to have value as a signal. Card

All a pure waste, in terms of practical value. But NOT irrational, because they are costly signals of commitment.

"Costly signal" theory is very common in zoology and biology/evolutionary theory.
Grazing on the savannah, a gazelle spots a leopard moving through the tall grass fifty meters away.

What does the gazelle do? It jumps STRAIGHT UP, two meters high!
That wasteful release of energy shows the big cat, "I'm not easy to catch!" and the cat looks somewhere else for prety. (Yes, gazelles really do this, as you likely know).

You see this in birds a LOT: Mother bird comes back with a juicy worm. ALL the babies in the nest go nuts, wasting energy. Mama gives worm to most vigorous squawker. Baby bird is wasting energy, but signalling fitness, gets the worm. Weak baby starves, but might not have survived anyway.

The Great Wall of China was a costly signal. Barbarians riding along on horseback,
suddenly see a wall stretching out of sight in both directions. Wow! A kingdom that wealthy must be able to maintain a huge army. Lets go somewhere else.

The basic result is that only signals that cost resources, that WASTE resources convey information.

Signals that don't waste money are called "cheap talk," like "No, honey, I'll respect you in the morning. Seriously, I will."

Is this really not a widely known concept?


Anonymous said...

You had your answer at "One of the editors..."

CHE editors undoubtedly spent their undergrad years at Amherst reading Wendt, not Spence.

(And that gazelle behavior is called "stotting." Great word.)

(Also: Great ad in Forbes this month -- don't have my copy handy -- with a pic of a diamond necklace and text to the effect of "Chocolates and flowers say, "Let's see how it goes."")

Anonymous said...

My guess: ~35% of nerds and ~0.5% of non-nerds are aware of costly signaling. When I talk to regular people about stuff like this, they have no idea [or interest].

The CHE guy is most likely a nerd, so I'd give him 35% odds.

Anonymous said...

Outside of economics class I had not ever heard of this very common sense concept. So no this is not known outside of econ circles.

Anonymous said...

China and India walk away from WTO talks. The MSM argues the round has failed and the WTO is doomed. Yes, it is indeed an obscure concept.

Chris Lawrence said...

The Mungowitz is well-traveled; I'd never heard of 764-HERO before this post, and I thought I was in tune with all the emo kids...

As for the costly signals concept... yeah, I don't think this is very common knowledge, at least under that terminology. Intuitively people know what it is, of course; that $100 co-pay at the ER is a pretty good signal that you're not just there to complain about a headache.

It's probably covered in UG psych and econ and possibly some IR/IPE courses, and if you read past the Britain section in the Economist you'll learn what it is, but otherwise I doubt you'd stumble into it. Hence the blank reaction I get whenever suggesting using signaling in the political science job market...

Maybe my brain is fried from moving boxes around the apt but I don't quite get how the provost making the (phone?) call is a very costly signal (compared to delegating to the headhunting person); IME provosts just ain't that busy that a 5 minute phone call is an imposition. Hopefully the article will elucidate.

Tom said...

I had thought stotting was a sexual signal, but a brief search reveals support for Mungowitz's position. (I love Google).

I must grudingly agree with br's estimates (let's hear it for the government schools!). Implication: about 0.5% of the electorate make an informed choice based on the expected value of their votes. (sigh)

... unless that 0.5% just stays home! (double sigh -- valium)

pdroach said...

It's been of great value and interest to we human sociobiologists for 33 years. Zahavi's 1975 handicap priniciple is the way it was introduced to the professors who taught me in the 80s and 90s. I'm quite certain Zahavi's idea is the origin of its use in psychology as well. Was costly signalling used in economics prior to this time?

My economist friend is the only person who knows what I'm talking about with this stuff.

Say--I like the website. Just got directed to it via Carpe Diem, which I found through Mankiw.

I'm a physical anthropologist, but the economists speak my language. As for the other social scientists....sigh...sad deal, e.g.: Branch Derridians above.

Anonymous said...

How would the masses ever know of this term as it is not on wikipedia?!

Jonathan Hayward said...

There is a close popular concept: "flexing muscle". It may be more generic, or may not be. But people who may not understand the concept as illustrated from biology may understand if you say, that a gazelle "wasting" energy by jumping two meters in the air in front of a predator is "just" flexing muscle.


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