Signaling your ability to signal

by on July 10, 2011 at 6:32 pm in Economics, Education | Permalink

Robin Hanson writes:

…people in business signal to each other all the time. In fact, most of the on-the-job business learning that employees do soon 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 signal an ability to learn how to send later 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.

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 a boss is willing to pay more for an employee who went to a better school, even after that boss knows this employee’s “real” abilities, does not show that school isn’t all about signaling.

One way of wording this (which Robin may or may not accept) is that the signaling and learning hypotheses are not always directly opposed.

Tomasz Wegrzanowski July 10, 2011 at 6:52 pm

All this just signals that Robin Hanson never cared much about facts, he just believes what he wants to signal to believe and will happily skew any facts to the contrary. Why does he care so much about signaling this?

Ian Tindale July 10, 2011 at 6:58 pm

One hazard in selecting for prepackaged signalling tendency product from a brand name is that you’ll end up with perhaps greater similarity or homogeneity (or conversely, less diversity) in both the content or message that is being signalled and and method or way to do the signalling with.

Ian Tindale July 10, 2011 at 6:59 pm

One hazard in selecting for prepackaged signalling tendency product from a brand name is that you’ll end up with perhaps greater similarity or homogeneity (or conversely, less diversity) in both the content or message that is being signalled and the method or way to do the signalling with.

Andromeda July 10, 2011 at 7:16 pm

Seems to me the possession of prestigious degrees is to a large extent a signal of class. Which in itself may be an indication that one learned growing up how to send the signals favored by the upper class…but I can’t say that makes me sanguine.

Or, to be less theoretical: when I taught at a prep school people went to prestigious schools because it was What Was Done and their parents could pay for them and they believed there were only a few dozen good schools out there (and their upbringing had taught them the list). When I grew up attending public school in a far less affluent area, people went to college at the state university because their parents couldn’t afford more and people figured a degree was a degree and there was no reason to go paying ten times as much to get one. (And, of course, at school A people workshopped their admissions essays in English class and everyone took test prep and had their hands held through every step of the application process and so forth, whereas at school B I didn’t know test prep existed and my college counselors, of whom there were 4 for the 1300 of us, told me I was pretty much on my own if I was applying out of state.)

So…the colleges we go to generally signal that, when we’re teenagers, we tend to do what our local cultural norm tells us to do? Well, then.

JasonL July 10, 2011 at 7:18 pm

Agree with Tyler’s conclusion. They are not in opposition. Signals remain important because HR functions are absolutely horrible at anticipating talent and fit. Another type of signal – a large firm based in Place A has large centers in B, C, and D. Decision makers tend to remain in A and inherently don’t believe people in B are capable until they see them with their own eyes. If you are promoting people and don’t have real knowledge of the people involved, you are not sticking your neck out by limiting your pool to A.

Misaki July 10, 2011 at 8:08 pm

Learning signals has utility in some cases.

Disregarding signals has utility in other cases; and the inability to do this, often has negative externalities on society as a whole.

Frank July 10, 2011 at 8:44 pm

This post makes no sense to me whatsoever. :-)

st July 10, 2011 at 9:10 pm

what happen to the few that never went or quit the school? like steve job, bill gate, Dell, etc? look like the super signaling capable doesn’t need any schooling.

JeffS July 10, 2011 at 9:13 pm

I agree completely.

Schooling, especially in theoretical works is all about signalling when applied to the business world. Any person could learn the ropes in a business without 4 years of theoretical training (think soft sciences). But by going to school, people are signalling that they have enough money, or drive to complete school, and thus may not be as large of a risk to the hiring firm.

I also agree with Andromeda, focusing on the class issues.

Hyena July 10, 2011 at 11:55 pm

Shouldn’t Hanson suspect a deep problem in industrial organization, then? If a large amount of a business’s investments are in signaling to other businesses, doesn’t that mean we have either a trust or a verification problem? That’s essentially his take on education: the amount of signaling in education indicates that we need more efficient ways to verify qualities.

pravin July 11, 2011 at 3:34 am

yawn.signaling shnigalling. it is called prejudice .plain and simple.no need for a PhD to explain why the Old boys network works just fine.

Nano tubes & nano particles July 11, 2011 at 5:46 am

Nice post that one. Its right that every one has the ability. But who has best he gets the opportunity.

rettals July 11, 2011 at 6:18 am

I signal my ability to signal my signalling ability…

Xzibit July 11, 2011 at 2:12 pm

Yo dawg, I heard you like signalling….

Tim "Beatdown" Ferrell July 11, 2011 at 2:39 pm

This is what makes the Internet great.

Kelly July 11, 2011 at 9:12 am

I think this is related to the “what did you learn in school” conversation. My answer is that I learned that there is a system, and I learned how to work the system for my personal advantage. The trick is to do it while preserving the part of me that wants to learn, build, achieve, etc.

Now I’m in corporate America, signaling my allegiance with the minimum resources possible, and spending the remainder of my time and effort on things I care about (both within and without my job).

Scoop July 11, 2011 at 10:18 am

Tyler’s conclusion only works if you believe that signaling, for the most part, serves useful purposes to improve productivity and utility. If you believe that most signaling is wasted effort and that humanity would greatly benefit if we did far less of it and used the saved time to produce more (or relax more), then Tyler’s theory doesn’t hold from any societal standpoint. That said, it still holds from the standpoint of an individual biz, which has little power to reduce the overall use of signaling.

doctorpat July 11, 2011 at 9:43 pm

I am left with the question of why schools/colleges/businesses don’t teach signalling directly, instead of hoping people pick it up by osmosis. Wouldn’t that provide a large competitive advantage?

rettals July 12, 2011 at 4:53 am

That would send out the wrong signal.

Gary Furash July 15, 2011 at 10:35 am

Can you write a bit more about signalling in general or point to a resource?

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