In economics and biology, honesty is understood in terms of signals. Signals are anything used to communicate, to convey information. A price is a signal of value. Conspicuous consumption is a signal of wealth. A growl is a threat — and the growl’s depth is a signal of the size of the creature’s body cavity. Signals are said to be honest when they reliably correspond to an underlying trait or fact about the world. Otherwise they are dishonest or deceptive. The temptation to deceive is ubiquitous. Deception allows an agent to reap benefits without incurring costs. That’s why the best signals — the most honest ones — are expensive. More precisely, they are differentially expensive: costly to produce, but even more costly to fake.
Posted on: Fri, 12 Jul 2013 04:00:08 +0000
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