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Signs and Signals…

Written By: The Homo Economicus on March 18, 2009 No Comment

I’m not a native English speaker (as many of you that read my grammatical mistakes in this blog from time to time might notice), but I think I can explain the difference between Signs and Signals and what do I mean when I mention those in this post.

While Signs is what you probably already know – a Sign – such as a road signs or sign languages or localization signs, etc. Well, you get the idea.

But when I refer about Signals I mean the economic sense of the word. Signals is what individuals (or firms) can broadcasting to the world, in general to *signal* that they belong to a specific type of person or they will take a certain decision or they will make some kind of action. The big question up to this point is: why to signal instead of saying what type of person are you or what decision are you going to take?

Sometimes there is incomplete information and you want to take advantage that other people don’t see what is in your mind, so either you can signal to confuse them and make them thing that you are a different type of what you really are or simply there is not enough space to say all the relevant information so you have to signal the most important things that will hint what kind of individual are you without just saying everything.

For instance, let’s start with the second explanation – when you just cannot say everything about you. A Curriculum Vitae is a signal. In one page you cannot write everything you would like the potential employers to know. So you signal the more important things to transmit that you are responsible, skilled, etc etc. You cannot come and say: “I’m skilled and smart, give me a job”. You have to signal in a proper and credible way. (There is a post coming soon on the rational about writing a CV).

Another example is when you buy a used car. You don’t know the buyer, and you don’t know the car. So he will always signal that the car is good and make the signal as credible as possible. Graduate school applicants will signal in their application to the admision committee on why should they choose them before other candidates. Anyway, people signal all the time.

I just found some interesting signs lately which I believe are also there to signal. I am sure you saw adds like this. The first one I’m sure you all saw it somewhere. I found it inside of the Men’s restroom:

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Is this a sign, or also a signal? Well, maybe the owners of this restaurant are signaling to the customers that it is a clean restaurant, and the customers don’t have to worry about cleanliness  and the food not complying with the minimum hygienic requirements . (for Seinfeld fans: remember what happened when Jerry saw Poppie going out of the bathroom without washing his hands). But, do you really think that the employees in that restaurant go to that bathroom?

Another sign/signal is the following:

img00086

It says: “Please leave all unpaid merchandise outside restrooms, Thank you.”

This belongs to the Harvard Coop in Harvard Sq. Apparently people were taking books to read in the bathroom. Would you buy a book that was taken to the bathroom by other? Well, maybe you won’t. But there is no way to know about that. This sign is not an enforcement of the rule, but more a signal for you to be sure that your book wasn’t taken to the bathroom by some stranger and that your book is free of stranger’s germs!

Signals are all around us: marketing, people talking or simple signs. In fact, some of the (weird) signs that we see around are – in part – meant to be signals – specially when those signs are not enforced.

This is it for now!

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