I don't know much about signaling, but I thought the whole point was to spend money on nothing. It won't work if the money goes somewhere useful.
For example, let's say that a Rolex costs $4000, and that you could buy an equally-beautiful watch for $500. You're spending $3500 for nothing. If we can believe MacAskill's book Doing Good Better, $3500 is about what it takes to save a life in Africa. If there were a $4000 watch that included both the $500 watch and a saved life in Africa, and showed it conspicuously, I don't know that it would work as a signal.... (read more)
I was trying to get my cousins to realize that I was rich, and they didn't need to feel guilty for the help I was giving them. I gave 500 bucks to the next homeless dude to ask us for change, and they seemed to get it. Same principle as literally smoking the money. Buying an expensive watch wouldn't have worked as well, they'd have just thought I liked watches.
4ChristianKl
The fact that a lot of charities run gala dinners and wealthy people are willing to pay a lot of money for that, suggests that the model can work.
I think many more rich people go to charity gala dinners than rich people smoking cigars with $100.
1Benquo
Katja Grace's post on cheap signaling seems relevant here:
I don't know much about signaling, but I thought the whole point was to spend money on nothing. It won't work if the money goes somewhere useful.
For example, let's say that a Rolex costs $4000, and that you could buy an equally-beautiful watch for $500. You're spending $3500 for nothing. If we can believe MacAskill's book Doing Good Better, $3500 is about what it takes to save a life in Africa. If there were a $4000 watch that included both the $500 watch and a saved life in Africa, and showed it conspicuously, I don't know that it would work as a signal.... (read more)