Splinterlands Economics: Signaling

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Hello everyone! We are back again today with another edition of Splinterland Economics - a series in which we introduce a basic economic concept and then apply it to Splinterlands. If this is your first time reading, just to tell you a little bit about myself: my day job is in an unrelated area but I consider myself a little bit of economics nerd - I read a little (or maybe way, way) more news than I should, double majored in econ, and am obsessed with optimization. I love the way Splinterlands is equal parts card game and resource allocation game. My goal with these articles is to share a little bit of what I know with you all.

Our subject today is deals with one of the many ways we communicate with both friends and strangers. You are probably familiar with communicating in conversations. You may also recognize that there is often more being "said" during conversations than simply which words are spoken. If you have ever used your blinker while driving, filled out your resume, or waved to an acquaintance then you may already have some experience with other examples of the concept - today, we'll be discussing signaling!


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What is signaling?

Signaling, in a very general sense, is any way that we can use to communicate information. Signaling in the context of our discussion today is a way to share information when there is imperfect or asymmetric information. And when it comes to human beings, there is oh so much imperfect information. Whether it is for work, leisure, or our relationships, signaling plays large roles in our interactions with others.


If you have ever gone through applying for a job, then you should have experienced many examples of signaling. At the beginning of the process, then the employer may have very little information about a prospective employee. The applicant will often use various forms of signaling in order to show the employer competence and interest in the job. For example, listing previous jobs and degrees on your resume or obtaining a referral from someone the employer trusts are potential ways in which you may signal to the employer that you are capable of doing a good job if you are hired. Dressing up nicely for an interview or showing that you have done research on a company are signals that you are genuinely interested in the position and are not simply wasting the employer's time.

Signaling also has applications in gaming, since there are many situations in which you are working with or against other players. For anyone who has heard of Magic the Gathering, there is a format of play called drafting, where 8 players will open up random packs of cards and select from them in order to build a deck. While "table talk" is not allowed, experienced players will often signal their plans by carefully monitoring the cards they pass to the player next to them. One particular player took signaling to a whole different level by wearing a shirt which stated on it exactly which cards he would be taking. Oh, and if you were curious who it was - that was Zvi Mowshowitz, who has since been inducted to the Magic Hall of Fame.

One final area? (there are plenty more, but we'll stop at 3 for today) Relationships. Signaling is crucial in relationships because whenever you get to know someone then they start off as an unknown. Signaling is a way to communicate (among other things) interest and commitment. For example, eye contact, flirting, or simply swiping in the proper direction can signal interest. Spending large amounts of money and time on gifts, a ring, or a wedding are signaling commitment, since those high costs make it more likely that those two people are "serious" about a relationship.


How do we apply it to Splinterlands?

While playing your ranked battles on the ladder, remember that you are both sending and receiving signals, whether they are given intentionally or not. Your recent match history is shown to your opponent, and you can see theirs as well. Do you see obvious patterns? That is a strong signal that they may be more likely to choose a particular splinter or set of cards for a battle. Have you been playing a lot of the same cards recently and sending off strong signals of your own? You may be able to surprise your opponent by choosing something a little different and mixing things up.

Crypto is an area where everyone has the option to remain anonymous, and signaling becomes important any time where we want to build trust. On Hive we may signal that we are a real person by sharing limited details about ourselves, going through sometimes burdensome KYC processes, or by having meaningful interactions with other users over time. Whenever you are asked to go through some signaling exercise, it is helpful to be able to identify the costs of doing so, as well as the benefits you could receive once you have completed it - for example, people who have done more signaling that they are "real" or authentic may be able to enter a wider range of tournaments or be more likely to receive an upvote, at the cost of giving up a bit of anonymity. Signaling most certainly has a cost associated with it, and it is up to you to make the decision on whether or not it is worth it.

Trust becomes of even greater importance when it comes to projects, since investors or players will not want to invest or enter in an ecosystem where developers are not trustworthy or reliable. Rug pulls, hacks, or simple incompetence are all too common and it is a vital task for developers to convince people that they are good at what they do and have their best interests at heart. Signaling can play an important role in that process. As always, my blogs should not be taken as financial advice, but I personally feel that the Splinterlands team does a great job of signaling their intentions for the game. In town halls they frequently discuss future plans and the current state of the game, and their balances of game assets show that they have significant amounts of "skin in the game" - all strong signals that they understand what they are doing and are planning on sticking around for a long time. If you want a fun exercise (as well as to do some valuable research for yourself), take a look at one of the recent town halls. Pay close attention to what people say, how they say it, and how they act while doing so in order to identify their signals and make your own judgement!


Why should we care?

Signaling, by all means, should not be taken as an absolute indicator. Do remember that just as people can lie or slander with words, they can also be deceptive in their signaling - but that doesn't mean it should be ignored! You wouldn't walk into a contract negotiation or even just to the supermarket with earplugs or a blindfold on, and the same exact concept applies here. Paying careful attention to signaling gives us a whole additional dimension of information that may otherwise completely sail over our heads without us even knowing. Whether it is while playing games, participating in social interactions, or choosing where to make our investments, signaling allows us to both communicate better with other people and to better interpret their actions and intentions.


Thank you so much for reading all the way to the end. Interested in seeing some more of my writing in the future? Be sure to give me a follow! In the meantime, if you'd like to see some of my recent posts:


Thinking about giving Splinterlands a try but haven't signed up yet? Feel free to use my referral link: https://splinterlands.com?ref=bteim, and be sure to reach out to me if you have any questions!

All images used in this article are open source and obtained from Pixabay or Unsplash. Thumbnails borrowed with permission from the Splinterlands team or made in Canva.



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I wonder if you'll ever run out of economics topics to apply to splinterlands. Always a good read. Sharing this on twitter.com/PraetoriaDigest.

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Thank you! There are plenty of topics to explore, hopefully I can keep coming up with interesting ways to make the connections to Splinterlands 🤣

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