Re-Interpreting Signaling with Systems Thinking: A Concept for Improving Decision-Making Quality

This paper introduces a concept named ‘signaling re-interpretation,’ which aims to improve the decision-making quality and keep the decision maker from losses ex-ante. Signaling re-interpretation includes the essence of signaling theory and systems thinking by taking the idea of signaling effect and other essential components in the system sequentially into consideration. Thus, signaling re-interpretation may overcome the obstacles signaling effect confronts in the application, such as the deferred correction of interpretation and the blind spots from an objective perspective. The expected contribution for practitioners lies in providing a perspective which tallies with decision makers’ needs, and the logic is easier for practitioners to understand. Thus, it increases the convenience for practitioners to apply and the decision is made from a well-thought-out consideration. As for researchers, signaling re-interpretation shows a more comprehensive framework which may reveal more crucial components affecting the decision quality. Applying signaling re-interpretation into empirical testing may also help the result become more representative and answer more to the research context. Accordingly, signaling re-interpretation will extend the application of the signaling effect.