Spence’s (1973) signaling theory posits that in situations of information asymmetry (e.g., an employer not knowing a candidate’s true ability), individuals send costly, hard-to-fake signals to indicate quality. Historically, university degrees served this function. This paper extends signaling theory to digital badges: verification is a signal of platform-endorsed authenticity. Unlike self-reported expertise, verification carries platform risk—if a verified user spreads misinformation, the platform’s own reputation suffers. Hence, verification was originally a credible signal.
Which do you currently use for networking?