Abstract Seemingly reckless, wasteful, or self-harming actions depicted in narrative sources are embedded in the philosophical and political discourse of Warring States and early imperial China (around the third to the first century bce). Signaling theory unveils the underlying rationality of many such acts by demonstrating how they allow actors with conflicting interests to pursue their goals while reducing costs compared to alternative scenarios. Ancient Chinese thinkers did not discuss signaling theory in the abstract; they were, however, keenly aware of the underlying mechanisms, at times articulating them in the context of specific cases. Comparisons of multiple narrative versions suggest that plot elements related to signaling became more pronounced and the understanding of signaling more profound during the period, most likely due to heightened socio-political and military competition.