Agents Require Metacognitive and Strategic Reasoning to Succeed in the Coming Labor Markets

Current labor markets are strongly affected by the economic forces of adverse selection, moral hazard, and reputation, each of which arises due to $\textit{incomplete information}$. These economic forces will still be influential after AI agents are introduced, and thus, agents must use metacognitive and strategic reasoning to perform effectively. Metacognition is a form of $\textit{internal reasoning}$ that includes the capabilities for self-assessment, task understanding, and evaluation of strategies. Strategic reasoning is $\textit{external reasoning}$ that covers holding beliefs about other participants in the labor market (e.g., competitors, colleagues), making strategic decisions, and learning about others over time. Both types of reasoning are required by agents as they decide among the many $\textit{actions}$ they can take in labor markets, both within and outside their jobs. We discuss current research into metacognitive and strategic reasoning and the areas requiring further development.

@article{zhang2025_2505.20120,
  title={ Agents Require Metacognitive and Strategic Reasoning to Succeed in the Coming Labor Markets },
  author={ Simpson Zhang and Tennison Liu and Mihaela van der Schaar },
  journal={arXiv preprint arXiv:2505.20120},
  year={ 2025 }
}