Multidimensional signaling

This seems related somehow to the "diamond in the rough" intuition, that if you're a discerning gem specialist you can distinguish between a valuable uncut gem and a pebble, which gives you an advantage relative to the uninformed public who are better off waiting until a professional jeweler has polished and set the gem.

This is also related to the common statistical problem where e.g. pretty much everything we think is healthful may become more correlated with health as health enthusiasts follow the new official advice.

It's called Berkson's paradox and it can be used to explain all kinds of real life observations like "why are all the handsome men I date such jerks" (http://www.slate.com/blogs/how_not_to_be_wrong/2014/06/03/berkson_s_fallacy_why_are_handsome_men_such_jerks.html) or why google discovered that being good at programming competitions negatively correlated with being good at the job.

Interestingly, this is actually ameliorated by culture being cut along socioeconomic lines. So the people who try to wear a given style mostly have similar wealth, and therefore most of the variation in their stylistic quality is not caused by wealth variation.

Promoted to Featured. While this is a solid nugget-like post about signalling, I probably wouldn't have put this in Featured on the idea alone. However I really like it further as it's explanation is clear and example-driven, it has a helpful hand-drawn diagram, and it's no longer than it needs to be.

I think a good tie in here is the idea that we all have various forms of capital: social capital (your relationships / tribe), personal capital (your skills), and financial capital (your money / property). The reason to frame these as capital is to prime the notion that these are all fungible goods that can be exchanged for one another, and that all lie on the same axis of giving the owner more options and greater leverage. On one level this is just describing the halo effect, but I think you could also use it as the explanation. If capital in one area can be turned into capital in other areas, then dressing well is an accurate signal of overall ability to assert oneself. (I think “power” is too loaded of a term, but probably the best to describe the single axis these all lie on.”)

Flipping this around: this seems like yet another data point in favor of investing at least moderately in signalling. Heuristically, people won't distinguish your lack of caring-about-signalling from lack of ability-to-signal.

Presumably it would also lead us to think that having lots of free time, or being very concerned about [clothes/wit/grades] was better - but this does not seem to be obveously the case.

Luckily, it seems we also have some specific signals to tell us rich vs poor, specifically conditioned on taste. This might alleviate the effect significantly, though perhaps not fully.

The problem starts to look ill-posed if you look at all the factors, though. Of course better taste has to correlate some with actual wealth, as if it provides any value at all it will give those people better social connections, etc. This whole cluster of value-providing traits is in fact correlated—and specifically because they're correlated does this central dynamic exist, that wealth and taste (and any other value-providing trait) can both be traded in for a costly signal. So to postulate a world in which they don't correlate would be postulating a world in which this dynamic doesn't occur.