DRESSCODES 17

The theory of costly signaling (Spence 1973) is a well-established paradigm in economics and theoretical biology, where it is also known as the Handicap Principle (Zahavi 1975). In this talk, I will give an analysis of two minimalistic game-theoretic models with two states ("high" and "low"), two signals (the presence and the absence of a costly signal S), and two actions ("accept" and "do not accept"). In the first model, the cost of the signal is in terms of an individual effort, a physical cost, of producing the signal, which is not uniformly distributed among individuals; in the second, it is in terms of a monetary cost, uniform among individuals. This separation is of analytical not descriptive value. Each of the models alone is sufficient to provide an explanation of the phenomenon, but they can of course easily be combined. I then analyse the equilibria in these games and illustrate the results by examples with an emphasis on signals of dress. Indeed, I will argue that dress (along with language) is one of the chief expressions of costly signaling in social interaction as it is permanently put on display. A second chief characteristic of costly signaling in dress is that it systematically combines the two aspects - a physical, individual effort and a monetary cost. The prototypical example is the wearing of high heels: It is of a physical cost that different individuals might master in different degrees, but owning a pair of high heels of a certain brand is also of monetary cost. (Possibly, there are also search costs involved, which again demand personal physical effort or money.) One and the same "sign" therefore signals in various dimensions. The formal analysis of the equilibria in these games allows us to account for phenomena such as "overstatement"/"understatement" and "counter-signaling" (the phenomenon that the absence of any costly signal stands for the very high type).

The talk is based on this paper (forthcoming in the International Journal of Game Theory): https://signaling.u-paris2.fr/Pawlowitsch/sn-2024-Hofbauer-Pawlowitsch-Ev-Dyn-C-Signaling.pdf