Why did individuals enslaved at Poplar Forest waste their hard-earned cash on fancy buttons? The question is enormously important because to answer it we need to engage in a much larger issue: why do humans engage in conspicuous consumption? The answer that I want to pursue here begins with the recognition that signaling personal worth or competitive ability is problematic business when there are conflicts of interest among signalers and receivers. Such conflicts are a pervasive part of human social interactions. Consider two individuals in competition for the same resource. The inferior competitor would benefit if she could send a signal of her competitive ability or quality that convinced a superior competitor that her level of quality was higher than it actually was, and caused the superior to cede the resource. In other words, signalers have an incentive to cheat. However, receivers of signals benefit from not being deceived. How can they eliminate the chance of being fooled by an inferior competitor? If a dishonest signal were too costly to produce, then it might not pay inferior competitors to try to send it. And if receivers insisted that signals be costly, then it would ultimately pay signalers to send only signals whose honesty could be guaranteed by their cost. In this model, the wasteful resource expenditure that we call conspicuous consumption is a predictable outcome of any signaling system that works in the context of competition among individuals within groups (Neiman 1997). In Heath's example, individuals enslaved at Poplar Forest discarded their perfectly good white buttons and bought gilt ones because of the superfluous costs they thereby had to pay. Sporting new gilt buttons was a costly and thus honest sign of the owner's competitive ability because individuals of lower ability could not pay this cost.


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