While people generally adhere to group norms for fear of disapproval or reprimand, anecdotal evidence and the occasional study suggest that high-status folk feel free to break rules—by eating with their mouths open, violating traffic laws, and expressing unpopular opinions. But how is nonconformity interpreted by others? Do we see it as a sign of status? New research, to be published next year in The Journal of Consumer Research, suggests that we do. The authors call the phenomenon the “red sneakers effect,” after one of them taught a class at Harvard Business School in her red Converse.

The red-sneaker effect fits in with a wider body of research on the idea that certain observable traits or behaviors signal hidden qualities by virtue of their “costliness.” For instance, a peacock’s colorful tail feathers make it easy prey for predators, but they tell a peahen that he’s fit enough to sustain the risk. The more one has of the trait to be touted (fitness, say), the less costly the signal (feathers), making the display of the signal a reliable proxy for the trait. This is how conspicuous consumption works: jewelry is costly, unless you’re rich and won’t miss the cash. Similarly, deliberate nonconformity shows that you can handle some ridicule because you’ve got social capital to burn.
The economist Nick Feltovich and his colleagues have done work demonstrating that this kind of behavior—known as costly signalling—can also lead high-status people to avoid being ostentatious. Imagine three groups of people: those with low, medium, and high amounts of a desirable trait, like wealth. Someone without much income would have to make big sacrifices to buy a BMW. If you’ve got a bit more money—you’re a medium—it’s easier for you to signal wealth, and you might buy status symbols so that no one mistakes you for a poor person. A really wealthy person, on the other hand—a high—can distinguish himself from the mediums by choosing not to send costly signals of wealth. If he has enough secondary signals of status—a prime address, a high-profile list of friends—he’ll feel secure in not being mistaken for poor. (Understatement can also work when signalling talent, popularity, or intellect. Thus, Harvard graduates say only that they went to school “in Boston.”)

In other words, you look cool if you break the rules, but only if people know that you broke the rules knowingly.

I hypothesize that playing the contrarian is a simple way to signal non-conformity and power, but it can be a bit of a parlor trick if used too often. There's a fine line between being a reasonable skeptic and someone who just wants to stand off to the side smoking a cigarette.