xamdam comments on Selfishness Signals Status - Less Wrong
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That's what I mean by "the everyday connotations carried by the term".
The OP's hypothesis is that if I see someone acting selfishly, I will choose my behaviour toward them on the basis of my inferring from this selfishness a quantity the OP calls "status". I don't really understand this hypothesis.
Consider the following situation. I'm invited to dinner. I notice an individual at the table who's grabbing food from everyone's plates, including mine. That counts as selfish behaviour in my book. Nobody reacts in any other particular way to that individual's behaviour; that is, their behaviour toward him is the same as toward each other, and only this individual differs from the others, in this particular respect only.
The OP's prediction is that I would assign high status to that individual. My intuition is that I would consider them a little crazy, and interpret the others' behaviour as tolerance (which, again intuitively, I would equate to the individual having low status).
By contrast, if you tell me that someone is a dictator, what I would expect based on that hypothesis is that others around him behave in particular ways: they will show deference, fear, eagerness to please them. That is because my understanding of dictators is that they will routinely have people around them shot or tortured if they displease them (and sometimes even if they don't, just as a whim). The fact that the dictator has this strategy is entirely sufficient to explain his entourage's behaviours towards him: "status" strikes me as a superfluous hypothesis.
I'm confessing my ignorance of what explanatory work the term "status" is supposed to achieve. No "countersignaling" (I should really say "dissembling" or something like it) on my part here, just honest confusion. Pointing me to an authoritative source could be a good start to my correcting this state of ignorance.
Yes, high status behavior can border on crazy (while being just short of it). I knew of a rich real estate guy who would walk around in "sports pants" that would be best described as ballet tights. At the same time I knew he was rather shrewd and well thought-out. "Peakocking" comes to mind.