Mechanism
Conventional Signals
TL;DR
Conventional signals are kept honest by receiver retaliation.
Conventional signals are kept honest by receiver retaliation. Male house sparrows have black throat bibs ('badges of status') that predict dominance. Bib size is cheap to produce (melanin pigmentation), yet the signal remains honest because males who display oversized bibs relative to their actual fighting ability are attacked by other males who 'call their bluff.'
Business Application of Conventional Signals
Brand reputation, customer reviews, industry awards, partnerships, and endorsements are conventional signals - cheap but kept honest by social enforcement and reputational consequences.