Those Signaling Sneetches

What is signaling? Why is the costly-to-fake principle so important to successful signaling? How can signaling be used to provide public goods and overcome free-rider problems?

Meet the Sneetches.

The Sneetches were broken into two camps, those with green stars on their bellies (Star-Belly Sneetches), and those with "none upon thars" (Plain-Belly Sneetches). The purpose of a signal is to convey some meaningful information. In the case of the Sneetches, the Star-Belly Sneetches believed themselves to be superior than the other sand used these stars to identify other members of their groups in distributing public goods like frankfurter roasts, picnics, parties, and marshmallow toasts.

Cults often operate in a similar manner, according to Larry Iannaccone, where elaborate visual and easily monitored signals are used to seperate the group from potential free-riders who would otherwise consume valuable resources without contributing.

The point of the signal is to be costly, often intentionally meaningless and without use.* It must cost enough that it becomes pointless for non-members or others with "fake" intentions to adopt the signal. In other words, the cost of the signal cannot be quickly recovered by those who would only join the group for a short-period of time.

This point is clearly illustrated in the book by Sylvester McMonkey McBean, who invents a machine capable of printing stars onto the bellies of the Plain-Belly Sneetches for the modest sum of $3. The original Star-Belly Sneetches lament this:

"We're still the best Sneetches and they are the worst. But, now, how in the world will we know," they all frowned, "If which kind is what, or the other way round?"

McBean quickly invents a second machine that removes them for $10, allowing the original group a new means to seperate themselves.

* Like a degree from the University of Dayton...just kidding Flyers ;)