1 The Benefits of Cost: Politics and Signaling Theory Jonathan Hassid* Bartholomew C. Watson* Jakub Wrzesniewski* *University of California, Berkeley Department of Political Science Paper presented at the Political Science Graduate Student Conference University of California, Berkeley May 2, 2007 DRAFT VERSION—PLEASE DO NOT CITE OR CIRCULATE ABSTRACT: The Balkanization of political science has too often circumscribed scholars into narrow, restrictive and even isolated camps, stifling dialog and preventing cross-fertilization. Opportunities for synthesis often emerge outside traditional doctrinal boundaries, and in recent years social scientists have found fertile theoretical ground in concepts adapted from the biological sciences. One concept of special note not entirely novel to political science, though previously rather underdeveloped and ill-defined, has the potential to support boundary-spanning work across some of the internal divisions of comparative politics – costly signaling. We will analyze this broad topic in the context of two examples from contentious labor politics: the contemporary Chinese government’s apparent toleration of multiplying protests and the unexpected breakdown of union wage negotiations in 1970s Britain. Costly signaling describes interactions in which there exists an incentive for deception and likewise an expectation of deceit for the party receiving the signal. The incurrence of cost by the signaling party becomes a means of demonstrating sincerity or commitment. The same strategic logic that underpins evolutionary selection mechanisms in a biological form exists in political behavior in a social form. The study of politics is fundamentally about this strategic interaction – between individuals and at higher levels of aggregation, such as social groups, political actors and, ultimately, states. This article seeks to demonstrate the fruitfulness and versatility of the costly signaling approach as an integrating idiom across comparative political science, one general enough to provide a common framework yet intellectually robust enough to provide the conceptual grit to deal with some of the most interesting problems, in matters including but not limited to loyalty norms, deterrence and escalation issues, and amends and reconciliation situations.