Signs of character: a signalling model of Hume’s theory of moral and immoral actions

Abstract

Abstract In A Treatise of Human Nature, Hume argues that morality pertains primarily to character, and that actions have moral content only to the extent that they signal good or bad character. I formalize his signalling theory of moral/immoral actions using simple game-theoretic models. Conditions exist under which there is a separating equilibrium in which actions do indeed credibly signal character, but conditions also exist in which there is only a pooling or semi-separating equilibrium. A tradeoff is identified between the signalling value of actions, and the consequentialist goal of incentivizing all character types to choose beneficial actions.