This article explains why people persist in altruistic behaviors that are detrimental to themselves through cost-signaling theory. According to this theory, altruistic behavior may not simply be a loss, but rather a process of proving to others that they are capable of greater good.
In life, we often see people who help others even when it doesn’t seem to benefit them at all, or even when it hurts them. Some people tutor their classmates in school without expecting anything in return, while others help strangers in trouble without expecting anything in return. Generally speaking, we call an action “altruistic” when it benefits someone else or society, even if it’s to our own detriment.
So, why do people engage in altruistic behavior if they don’t gain anything from it, but rather lose? If you think about the examples of altruistic behavior mentioned above, they are clearly detrimental to the person doing them. Nevertheless, it is a puzzling phenomenon that some people persist in these altruistic behaviors. This has led to various hypotheses in the literature about the reasons for altruistic behavior. In this article, we’ll discuss one of them: the costly signaling theory. If we understand this theory, altruistic behavior may no longer be seen as acting against one’s own self-interest.
To illustrate this theory, consider a situation where a student tutors a friend. If you think of a middle or high school classroom, you can easily imagine a student who is good at studying tutoring their friends during recess. In this situation, the student is giving their time and effort to teach their friends, but the friends are not paying for it, and it may seem like they’re reaping the benefits. From a simple perspective, it looks like the teacher is losing and the learner is gaining. In this case, there’s no reason for the tutor to continue this behavior. If the relationship was “I teach you once, you teach me the next time,” this might work, but in the real world, it’s often one-sided, so there needs to be an explanation.
In order to explain the free tutoring behavior mentioned above, we need to understand a few premises. First, the fact that you’re good at school should be attractive to others. In the modern world, it’s self-evident that an individual’s academic achievements are more or less proportional to their social success, including economic power and status. Therefore, being a good student is as attractive a trait in the modern world as being a good hunter was in caveman times. Second, the act of teaching others to study is difficult for students who are not good at studying. In other words, the act of tutoring can be enough to reveal that the person is good at studying. Third, the act of tutoring is not only noticed by the two of you, but also by the people around you. Finally, a particular student may want to be attractive to the opposite sex. It is an animal instinct to mate with the opposite sex, marry, and have offspring.
Based on these conditions and the cost-signaling theory, we can answer the question, “Why does altruistic behavior persist?” Altruistic behavior can be explained if we consider that the tutor is also benefiting. From the tutor’s point of view, he is giving his time and effort. However, by doing something that a struggling student might not be able to do easily, the tutor lets others know that he or she is good at studying. As a result, the tutor thinks he’ll be more attractive than he would be if he didn’t display his abilities. If he decides that the benefit to him outweighs the cost in time and effort, he will be motivated to tutor you.
This is the whole point of the cost-signaling theory: a person who performs an altruistic action may seem to have no benefit to himself, but he is actually benefiting from an action that others cannot easily replicate. The aforementioned example of tutoring is a good example of this theory. The act of tutoring becomes a “cost signal” because students who are not good at studying cannot easily imitate it. This makes the signal credible, and peers will distinguish between those who are good at studying and those who are not. This is called the “separation equilibrium” in the signaling game. In this separating equilibrium, the sender of the signal benefits by proving their ability, and the receiver of the signal benefits by getting reliable information, so everyone wins.
In addition to the examples that teach us to study, examples of cost signaling theory are easy to find. For example, a situation where one person in a group of friends wants to calculate the total cost of something. While it’s economically disadvantageous to do the math on your own, it can have the effect of showing off your financial strength and make you more attractive.
So far, we’ve seen the “cost signaling theory” through the example of a student tutoring a student. People who engage in altruistic behavior continue to do so because they can benefit from demonstrating their abilities. There are many other explanations for altruistic behavior, and people who volunteer with pure intentions cannot be explained by this theory. However, the cost-signaling theory does go some way to explaining why self-interested people act altruistically, which makes altruistic behavior no longer seem irrational. If you apply this hypothesis to the next time you witness altruistic behavior in real life, you may see things you didn’t before.
