One of the best books I have read in the last few years is The Elephant in the Brain by Robin Hanson and Kevin Simler.
The book makes two main arguments:
a) Most of our everyday actions can be traced back to some form of signaling or status seeking
b) Our brains deliberately hide this fact from us and others (self deception)
So we think and say that we do something for a specific reason, but in reality, there’s a hidden, selfish motive: to show off and increase our social status.
You may have heard about a similar concept before called conspicuous consumption. Conspicuous consumption describes the practice of purchasing luxury goods (or services) for the sake of signaling the buyer’s wealth in order to attain or maintain a certain social status.
A classic example of this would be a luxury watch: A Rolex isn’t better at telling the time than a cheap Casio – but a Rolex signals something about its owner’s economic power and thus their social standing.
This is not a new theory, but Simler and Hanson argue that a lot more human behavior can be explained by signaling. Here are a few examples from the book:
Consumption Signaling does not only explain luxury purchases but also consumption of all sorts of other goods: “Green products” are more about signaling a prosocial attitude than actually helping the environment. Other consumption signals include loyalty to a specific subculture (e.g. band t-shirts), athleticism & health consciousness (athleisure clothing) or intelligence (e.g. Rubik’s Cube).
Charity There are several indicators that suggest that giving to charity isn’t really about improving the well-being of others: The lack of effective altruism demonstrates that we don’t care much about the actual outcome of our donations and studies show that our charitable behavior is heavily driven by visibility (hardly any donations are anonymous), peer pressure (95% of donations are solicited) and mating motives (donations are higher and more likely when observed by a member of the opposite sex). Charity is about generous rather than actually doing good.
appearing
Education You would think that going to school is about learning and acquiring skills, but then why do students pay tens of thousands of dollars for Ivy League schools when all of the learning material is effectively available online for free? Why do we use grading systems when we know that students learn worse when being graded? The answer, again, is signaling: Education helps with credentialing and signaling to potential employers.
There are many more examples in the book (and I recommend reading the whole thing), the point the authors are trying to make is clear: Almost everything has a signaling component – we are just not aware of it. In fact, Hanson believes that “well over 90 percent” of human behavior can be explained by signaling.
Whether or not you agree with that exact number, I think it’s an interesting thought experiment to look at a specific behavior and think about what the hidden signaling subtext of that behavior might be.
Ever since finishing the book, the signaling behavior I’ve been thinking about the most is the adoption – and more importantly the monetization – of software products and services.
This is what this blog post is about.
Let’s take a closer look at signaling first.
The way I see it, signaling can be broken down into different components: