Signaling Paper

Signaling Paper

          Signaling tends to be the pervasive use of personal things that send signals about ourselves to other people. Information about ourselves is just as important as it is in economics. A used car salesman will know what’s wrong with a specific car more than someone looking to buy the car. The same goes for someone who is trying to sell their house to someone. It is very crucial in being able to distinguish when someone is using asymmetric information when trying to sell you something.

    I can remember the signals our real estate broker used on my parents when we moved into our current house very wholly. I never really thought about what she was doing when trying to convince us that this house is made for us. The person was very charming and nice to us because they wanted us to like them. I remember the use of certain words like “state of the art” kitchen when in reality it was just a bunch of Samsung products. Many comments were made about the granite countertops and the wooden floors. I believe that the crucial signal that the broker told my parents was that the house was located in a great neighborhood. We previously lived in a neighborhood that was going downhill very quickly so my parents were looking for something safer.

Another use of signaling that I found interesting and amusing is men wearing a wedding ring when they are single. We watched the clip of Seinfeld were George Costanza wore a wedding band to a party to attract himself to more women. What ended up happening was that he lost all his opportunities with those women because they believed he was married. I have heard of some instances where this works for men who are married. We discussed in class that some individuals like to date married people because they don’t bother them as much. This is the only case I see this signal working even though it is morally wrong.        

A signal that I hope to portray to other people is that I have a good job. I don’t necessarily want to brag about the job but instead use things like cars and vacations to display it. I believe it is important to show your success to others especially if you worked very hard to get there. It is also just as important to not seem cocky when doing so.