Too cool for school? explains signalling and countersignalling:
Contrary to this standard implication, high types sometimes avoid the signals that should separate them from lower types, while intermediate types often appear the most anxious to send the “right” signals. The nouveau riche flaunt their wealth, but the old rich scorn such gauche displays. Minor officials prove their status with petty displays of authority, while the truly powerful show their strength through gestures of magnanimity. People of average education show off the studied regularity of their script, but the well educated often scribble illegibly. Mediocre students answer a teacher’s easy questions, but the best students are embarrassed to prove their knowledge of trivial points. Acquaintances show their good intentions by politely ignoring one’s flaws, while close friends show intimacy by teasingly highlighting them. People of moderate ability seek formal credentials to impress employers and society, but the talented often downplay their credentials even if they have bothered to obtain them. A person of average reputation defensively refutes accusations against his character, while a highly respected person finds it demeaning to dignify accusations with a response.
How can high types be so understated in their signals without diminishing their perceived quality? Most signalling models assume that the only information available on types is the signal, implying that high types will be confused with lower types if they do not signal. But in many cases other information is also available. For instance, wealth is inferred not just from conspicuous consumption, but also from information about occupation and family background. This extra information is likely to be noisy in that the sender cannot be sure what the receiver has learned, implying that medium-quality types may still feel compelled to signal to separate themselves from low types. But even noisy information will often be sufficient to adequately separate high types from low types, leaving high types more concerned with separating themselves from medium types. Since medium types are signalling to differentiate themselves from low types, high types may choose to not signal, or “countersignal,” to differentiate themselves from medium types.
(Hat tip to Pax Dickinson.)