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date: 25 July 2021

Abstract and Keywords

This article examines signaling theory as an element of analytical sociology, and particularly as an analytic framework for accounting for irrational behaviors. It first provides an overview of the basic principles of signaling theory, focusing on the distinction between signs and signals as well as the concepts of differential costs and differential benefits. It then considers various sources of signal costs, including receiver’s independent cost, receiver-dependent cost, and third party-dependent cost, along with multiple sources of cost and signals that cost nothing to honest signalers. It also takes a look at a number of applications for signaling theory and concludes with an assessment of the genealogy of the theory, from Thorstein Veblen and Marcel Mauss to Pierre Bourdieu, Michael Spence, and Alan Grafen.

Keywords: signaling theory, analytical sociology, irrational behavior, signs, signals, differential costs, differential benefits, signal costs, honest signalers, Thorstein Veblen

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