What a signature costs
A spoken promise costs the same whether it is kept or not, so it cannot tell you which of the two you are looking at. Economics settled that in 1973, and in the same year it settled the other half:
Michael Spence
Meaning
Economists who first described how market participants prove their quality through expensive actions represent the theoretical foundation of professional credibility. Michael Spence authored the theory of signalling, which explains how people prove their value through markers that are difficult for others to imitate. He identified the mechanism that makes a record credible in the eyes of a stranger and helps to resolve the problem of hidden information.
Economic Logic
Trust is built on the cost of the proof. Spence showed that for a signal to work, it must be cheaper for the high quality person to produce than for the low quality person. This creates a natural barrier to entry.
If the signal were free, anyone could send it, and the information it carried would have no value to the receiver.
Signalling Origin
Information gaps between the buyer and the seller are filled by the acts of the seller. The work of Spence explains why a founder must spend so much energy on things that do not produce a direct output.
Theory Scope
Applications of this idea reach into every room where work is validated. Signalling is not just about jobs but about any arrangement where one side knows more than the other. It is the standard for checking intent.