{"id":1165,"slug":"rule-earn-one-audit-verified-credential-per-year-refuse-purchased","title":"R4 — Earn one audit-verified in-group credential per year; refuse all purchased credentials; sparse + verifiable beats dense + decorative","kind":"rule","scope":"business","status":"current","audiences":["kevin","candid-team"],"topics":["psychology-aversion","signalling-theory"],"reference_body":"**Rule:** Earn **one audit-verified in-group credential per year**. **Refuse all purchased credentials** (pay-to-play \"Top Marketing Agency for Contractors\" lists, badges where verification is not auditable to a third party, vanity directory listings).\n\n**Why:** Spence-style signal-quality dynamics ([[spence-1973-job-market-signaling]]) + audit-gap pooling-equilibrium effect ([[audit-gap-problem-pooling-equilibrium-degradation]]) mean a bad signal **contaminates** the credible signals around it. A studio brandishing a pay-to-play badge alongside an HCRA-licensed customer roster looks worse, to a sophisticated reader, than a studio brandishing nothing at all.\n\n**How to apply:**\n- Concrete 2026 candidate: a documented case study with a Tarion-enrolled builder, published in *Canadian Contractor*, co-presented at an OHBA event.\n- Audit existing Candid public-facing materials against the [[sophisticated-gc-five-question-credential-heuristic]]. Remove anything that fails 3+ of the 5 questions.\n- The reason to refuse is not moral — it is signalling-theoretic. **Sparse + verifiable badge wall** beats **dense + decorative badge wall**.","rationale_body":null,"metadata":null,"links":{"outgoing":[{"slug":"research-brief-trust-networks-in-group-reputation-may-2026","title":"Research brief: trust, referral networks, and in-group reputation in Ontario's trades economy (May 2026 — Foundation Brief #3)","kind":"reference","scope":"business","link_type":"relates-to"},{"slug":"spence-1973-job-market-signaling","title":"Spence 1973 (QJE) — job-market signaling; signals work only when costlier for low-quality types to acquire than high-quality types; cost-drop collapses pooling equilibrium","kind":"reference","scope":"business","link_type":"depends-on"},{"slug":"audit-gap-problem-pooling-equilibrium-degradation","title":"Audit-gap problem — visual badge similarity collapses Spence pooling equilibrium; sophisticated buyers discount badge category and ask for underlying audit","kind":"reference","scope":"business","link_type":"depends-on"},{"slug":"sophisticated-gc-five-question-credential-heuristic","title":"Sophisticated GC's 5-question credential-evaluation heuristic — revocability / written threshold / liability / individual vs firm / in-group survivability","kind":"reference","scope":"business","link_type":"depends-on"},{"slug":"guildmaster-guildquality-audit-verified-survey-signal","title":"Guildmaster Awards (GuildQuality) — audit-verified survey signal; ≥90% LTR vs ~70% industry average; 20 responses min; disqualification for omitting customers","kind":"reference","scope":"business","link_type":"relates-to"}],"incoming":[]},"created_at":"2026-05-25T13:34:11.259Z","updated_at":"2026-05-25T13:34:11.259Z"}