Abstract

Costly-signaling theory is a well-established paradigm in economics (Spence 1973) and theoretical biology, where it is mostly discussed under the name of the Handicap Principle (Zahavi 1975). It has been advanced as an explanation for a remarkably wide range of phenomena---from educational credentials as a signal for productivity in the job market (Spence 1973), 

over the evolution of ``handicaps'' (Zahavi 1975, Grafen 1990), to the practice of inefficient foraging strategies as signals of social status (Bliege Bird et al. 2001, Bliege Bird and Smith 2005). Game theory provides a coherent modeling framework for costly-signaling phenomena by explicitly formalizing the interaction as a game with incomplete information. So far neglected, but in fact crossing into many of the debates in relation to costly signaling (such as whether a costly signal always perfectly reveals the ``high'' type or whether there can be ``cheating''), are the semantic properties of equilibria in costly-signaling games. For indeed, what makes costly-signaling games an interesting modeling tool from a semantic point of view is that the meaning of a signal is not given ex-ante as an assumption of the model, but arises endogenously, in equilibrium (or any other solution concepts that one wants to employ), as a function of the parameters of the model, notably, the cost of the signal and the benefit of success for different types and the prior probability distribution over types. In this article, I investigate the properties of the equilibrium structure of costly signaling games from this semantic point of view. I will do so by looking at a minimalist model with two different types (``good'' and ``not good''), two signals (the presence and the absence of a costly signal), and two different reactions to signals (``accept'' and ``do not accept'') that I investigate under different paradigmatic parameter constellations. The explanatory potential of this modeling framework is exemplified by two applications: style-shifting and politeness in language.

Location

CEPS - ENS Paris-Saclay
Bibliothèque Durkheim
4 avenue des Sciences, 91190, Gif-sur-Yvette