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In the book "The Elephant in the Brain" Robin Hanson & Kevin Simler state that:
The authors propose that “well over 90%” of human behavior can be explained by signaling: the stuff we buy or even the charities we donate to are done mainly to show off. But we do wrap this instinct in all sorts of rationalisations.
Signaling can be broken down into different components, explained through the act of buying some expensive snickers:
Physical products have signaling distribution built in. Apps live on your phone or computer. No one can see them except for you.
That's why some apps like Superhuman add a signature at the end of every email, or apps like Revolut send you a physical premium card.
Network membership is a powerful signal message. Users pay a membership fee to signal to other members that they are part of the tribe.
The financially most lucrative strategy for software companies is to provide distribution for free and instead monetize users who want to stand out of the crowd with paid signal amplification.
Life-long learner. Passionate about leadership, entrepreneurship, philosophy, Buddhism & SF. Founder @deepstash.
90% of our behaviour can be justified by our desire to show off.
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