Replacing expensive costly signals

by KatjaGraceMeteuphoric1 min read17th Feb 201813 comments



I feel like there is a general problem where people signal something using some extremely socially destructive method, and we can conceive of more socially efficient ways to send the same signal, but trying out alternative signals suggests that you might be especially bad at the traditional one. For instance, an employer might reasonably suspect that a job candidate who did a strange online course instead of normal university would have done especially badly at normal university.

Here is a proposed solution. Let X be the traditional signal, Y be the new signal, and Z be the trait(s) being advertised by both. Let people continue doing X, but subsidize Y on top of X for people with very high Z. Soon Y is a signal of higher Z than X is, and understood by the recipients of the signals to be a better indicator. People who can’t afford to do both should then prefer Y to X, since Y is is a stronger signal, and since it is more socially efficient it is likely to be less costly for the signal senders.

If Y is intrinsically no better a signal than X (without your artificially subsidizing great Z-possessors to send it) then in the long run Y might only end up as strong a sign as X, but in the process, many should have moved to using Y instead.

(A possible downside is that people may end up just doing both forever.)

For example, if you developed a psychometric and intellectual test that only took half a day and predicted very well how someone would do in an MIT undergraduate degree, you could run it for a while for people who actually do MIT undergraduate degrees, offering prizes for high performance, or just subsidizing taking it at all. After the best MIT graduates say on their CVs for a while that they also did well on this thing and got a prize, it is hopefully an established metric, and an employer would as happily have someone with the degree as with a great result on your test. At which point an impressive and ambitious high school leaver would take the test, modulo e.g. concerns that the test doesn’t let you hang out with other MIT undergraduates for four years.

I don’t know if this is the kind of problem people actually have with replacing apparently wasteful signaling systems with better things. Or if this doesn’t actually work after thinking about it for more than an hour. But just in case.