I've posted before on how we might parse regret aversion to get at a finer understanding of the intersection between information asymmetry and systematically biased beliefs. It occurs to me that purely instrumental ex post estimates of the outcomes of a market exchange are insufficient to judge its ex ante wisdom.
Most routine exchanges are purely instrumental. I get no special symbolic pleasure from buying lunch (though since Whole Foods is the nearest grocer's from my workplace, I often see folks who probably do), nor do I see my automobile as anything but a practical machine to sweep my meat and bones along the shimmering highways of this fair land.
Something yesterday encouraged me to rethink my approach to the automobile question. Mrs. W and I were walking our not quite two year old daughter out to the park when we overheard a teenage boy informing, in no uncertain terms, his teenage friend about how he was going to (I beg your indulgence if this isn't an exact quote), "put a fucking nitro kit all up in this bitch, son." It occurred to me that perhaps this young man had yet to adopt a more placid, reflective relationship with his motorcar.
Apart from a very brief moment of intemperate pique at the boy's juvenile ineloquence, I wondered at what instrumental purpose a nitrous kit in a cheap secondhand commuter vehicle could possibly serve. Yes yes, I know de gustibus non est disputandum, but drenched as I am by a stroll off the end of the EE pier, it seemed to me that perhaps that the young man in question was under the sway of a flavor of regret aversion bound in a courage sentiment. For those of us who have been young men ourselves at one time or another, we understand the urge to avoid being perceived as callow or cowardly. If that means having your wallet on a chain or a bunch of tattoos or a bit of a drinking problem, or in this case, a preposterous after-market modification to a Camry, does this count as the same sort of regret aversion or flaccid "coercion" that we're trying to get at in the sidebar conditions?
If there is some sort of social compulsion to conduct trades to support signaling, whether it's to look tough to a crew of teenage boys or to fit in with the neighborhood sewing circle (do those still exist?), should we consider that euvoluntary?
My first-blush reaction is to say yes. Here's why. Social signals must be costly to be effective. The very costliness is part of the value of the signal. Bronze age tribes didn't sacrifice oxen willy-nilly; oxen were wealth. Similarly, if you want to show that you're a prudent captain of industry, the expense of a tailored suit is part of its value. If finely tailored suits ran for the same price as a gas station hot dog, I predict that business folk would signal conscientiousness on other margins.
You can't earn honor by playing Call of Duty. IRL combat has no respawn.
And multiple margins of substitution mean that vendors can't really sustain true exploitation. If suits became as expensive as aircraft carriers, I'd expect corporate dress codes to change. So are social aversion something to fret over? Could be. And there are other interesting bits in there. Is smoking partly signaling? Marijuana use? What other margins do bans (or Pigovian taxes or nudges) push people towards?