{"id":74706,"date":"2022-07-30T17:45:00","date_gmt":"2022-07-30T21:45:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=74706"},"modified":"2022-08-08T12:10:30","modified_gmt":"2022-08-08T16:10:30","slug":"social-signaling","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/social-signaling\/","title":{"rendered":"Social Signaling Through Spending: Why We Buy Stuff"},"content":{"rendered":"\n<p>Why would someone buy a Tesla? Why do some people post photos of their glitzy hotel rooms on Instagram?<\/p>\n\n\n\n<p>Just as <a href=\"https:\/\/www.shortform.com\/blog\/body-language-crucial-conversations\/\">body language<\/a> allows us to communicate about things we\u2019d never put into words, Kevin Simler and Robin Hanson argue that many of our actions double as social signals or conspicuous fitness displays. This is especially noticeable when it comes to how we spend our money and other resources.<\/p>\n\n\n\n<p>Read more to understand the concept of social signaling through spending.<\/p>\n\n\n\n<!--more-->\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-spending-as-social-signaling\">Spending as Social Signaling<\/h2>\n\n\n\n<p>The authors point to the well-known phenomenon of <a href=\"https:\/\/www.shortform.com\/blog\/inconspicuous-consumption\/\">conspicuous consumption<\/a>, where <strong>we buy expensive (and often superfluous or excessive) things to signal our wealth, status, and power to others<\/strong>. For example, strictly speaking, nobody <em>needs <\/em>a Tesla. But owning one suggests several things about you:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>You have a lot of money.<\/li><li>You\u2019re interested in new technologies (which implies that you\u2019re well-informed and intelligent).<\/li><li>You care about sustainable energy and vehicle emissions (which implies that you\u2019re selflessly concerned with your impact on other people and the planet).<\/li><\/ul>\n\n\n\n<p>Note that none of these social signals is something we say outright. We don\u2019t walk up to strangers and say: \u201cI\u2019m rich, smart, and selfless.\u201d But a new Tesla promises to say all that for you. (Shortform note: <em>Non<\/em>-consumption can also send conspicuous signals. For example, one study argues that vocally quitting or <a href=\"https:\/\/blogs.scientificamerican.com\/talking-back\/conspicuous-non-consumption-the-performative-and-political-dimensions-of-facebook-abstention\/\">abstaining from social media can be a type of political performance<\/a>\u2014in other words, by avoiding Facebook and saying so, people can signal that they value more authentic communication or that they reject Facebook\u2019s status as a commercial entity.)<\/p>\n\n\n\n<p>Simler and Hanson argue that <strong>this kind of signaling isn\u2019t just about what <\/strong><strong><em>you <\/em><\/strong><strong>believe; it relies on your assumptions about what <\/strong><strong><em>other people <\/em><\/strong><strong>believe<\/strong>. They explain that lifestyle advertising (where companies focus on brand identity rather than extolling the strengths of the product itself) is meant to create common knowledge about the signals that certain brands send. For example, a Tesla wouldn\u2019t signal the above qualities if nobody knew that Tesla makes expensive electric cars.<\/p>\n\n\n\n<p>(Shortform note: This effect also explains the phenomenon by which people will agree with a political candidate\u2019s policies, but not vote for that candidate for fear that the candidate \u201cisn\u2019t electable\u201d or \u201cdoesn&#8217;t seem presidential enough.\u201d This kind of vote has nothing to do with the voter\u2019s opinion <em>of the candidate<\/em> and everything to do with what the voter thinks <em>other voters will think <\/em>about the candidate. <strong>Taming the elephant: <\/strong>Pay attention to times when you base your choices on what you think others think\u2014this often doesn\u2019t line up with what you actually want.)<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Why would someone buy a Tesla? Why do some people post photos of their glitzy hotel rooms on Instagram? Just as body language allows us to communicate about things we\u2019d never put into words, Kevin Simler and Robin Hanson argue that many of our actions double as social signals or conspicuous fitness displays. This is especially noticeable when it comes to how we spend our money and other resources. Read more to understand the concept of social signaling through spending.<\/p>\n","protected":false},"author":9,"featured_media":74709,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[7,31,9],"tags":[708],"class_list":["post-74706","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-lifestyle","category-money","category-psychology","tag-the-elephant-in-the-brain","","tg-column-two"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v24.3 (Yoast SEO v24.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Social Signaling Through Spending: Why We Buy Stuff - Shortform Books<\/title>\n<meta name=\"description\" content=\"Kevin Simler and Robin Hanson argue that much of our behavior, especially how we spend our money, doubles as a social signal. Here&#039;s how.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.shortform.com\/blog\/social-signaling\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Social Signaling Through Spending: Why We Buy Stuff\" \/>\n<meta property=\"og:description\" content=\"Kevin Simler and Robin Hanson argue that much of our behavior, especially how we spend our money, doubles as a social signal. 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