Signals of Status and Cooperation

Since Veblen (1899), signaling status through conspicuous consumption is presumed to be socially advantageous. Given the myriad of social benefits granted to high status individuals, it behooves people to ensure that others can observe their wealth and status.  In the present research, however, we examine when it is strategically better to be modest.  We demonstrate that status signaling conveys self-interest, which is inherently at odds with cooperation. As a result people cooperate to a lesser degree with status signalers because they expect that those individuals are less cooperative.  Furthermore, people show some awareness of the benefits of modesty and refrain from signaling status when they desire to induce others to act cooperatively. Thus, despite theory and evidence of the social value of signaling status, when the goal is cooperation, signaling status backfires.