CONCEPT
Signaling, Screening, and Reputation
The three classical mechanisms through which information markets partially resolve asymmetry — each now requiring reconstruction for a professional economy in which AI polish has rendered the traditional quality signals unreliable.
The economic literature identifies three mechanisms for partially resolving information asymmetry: signaling (the informed party takes a costly action to communicate quality), screening (the uninformed party designs a mechanism inducing revelation), and reputation (accumulated track record over repeated interactions). Each mechanism has worked in specific markets for specific goods. Each requires reconstruction for AI-augmented professional markets, where the lemons problem of polished output has disabled the traditional signals on which each mechanism depended.
In The You On AI Field Guide
Signaling requires a costly action that credibly communicates quality. Educational credentials function as signals because obtaining them requires effort correlated with the underlying capability the credential attests to. In AI-augmented markets, potential signals include process transparency (documented analytical trails), verification workflows (evidence of independent review), and third-party certification of judgment exercise. Each signal must be costly enough to be credible yet observable enough to be interpretable — a design challenge the markets have not yet solved.
Screening requires the