Seinfeld, Signals, and Games
This, week, I was reading Lionel Page’s fantastic post on his Substack, Optimally Irrational, which I fully recommend.
The post talks about why we use ambiguous statements, innuendos, and hints in communication. He writes,
“Communicating, and exchanging information is fundamentally cooperative… However, communication interactions are not pure cooperative games. They are what game theorist Thomas Schelling (1960) called mixed-motive games featuring both cooperation and conflict. We do not always agree with the people we talk to because we have different views (goals, preferences and beliefs). Finding out each other’s views and whether they are compatible is what Schelling calls the identification problem.”
— Lionel Page. (2024). The game theory of strategic ambiguity explained with Seinfeld
While talking about beliefs and higher-order beliefs (beliefs about others’ beliefs), Page writes:
“Common knowledge of differences in preferences and beliefs can be risky. This is why ambiguous statements, hints and innuendos are often used to convey meaning while avoiding common knowledge and retaining plausible deniability, if needed.”
— Lionel Page. (2024). The game theory of strategic ambiguity explained with Seinfeld
This is at the heart of what Page’s argument.
I have previously written about the use of signalling in communication, and my life mantra:
It's All Signalling
If you know me well, you should know these about me: I like samosas. Nay, I love samosas. I initiate conversations defending the existence of veg biryani. I like economics. I almost never stop thinking about the world from this lens. My life mantra is: “It’s all signalling”.
The insights to words ratio in Page’s post is high, and so is the fun to words ratio. After all, it is based on Seinfeld references! This goes to confirm my belief and argument about Why Economists Love Seinfeld!
Addendum: In revelation of my vanity, I also realized that Page had a nice thing to say about my Seinfeld post, haha.
I want to also recommend this paper, The Encryption Theory of Humor: A Knowledge-Based Mechanism of Honest Signaling by Flamson & Baret, which was shared by one of the readers of Page’s post.