Signaling your ability to signal

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.


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