Buyer Uncertainty About Seller Capacity: Causes, Consequences, and a Partial Solution

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Buyer Uncertainty about Seller Capacity: Causes, Consequences, and a Partial Solution Abstract Employers in an online labor market often pursue workers with little capacity to take on more work. The pursuit of low-capacity workers is consequential, as these workers are more likely to reject employer inquires, causing a reduction in the probability a job opening is ultimately filled. In an attempt to shift more employer attention to workers with greater capacity, the marketdesigning platform introduced a new signaling feature into the market. It was effective, in that when a worker signaled having high capacity, he or she received more invitations from employers, rejected a smaller fraction of those invitations, quoted a lower price to do the work, and was more likely to be hired. A back-of-the-envelope calculation suggests the signaling feature alone could increase market surplus by as much as 6%, both by increasing the number of matches formed and by helping to allocate projects to workers with lower costs. Terms of use: Documents in

Can Reputation Discpline the Gig Economy? Experimental Evidence from an Online Labor Market

“…This focus on guarding against worker opportunism now extends to the burgeoning literature on online labor markets. Studies, for instance, have examined how online employers infer workers' abilities from their work histories (Pallais 2014), oversubscription (Horton 2018), work through outsourcing agencies (Stanton and Thomas 2015), national origin (Agrawal et al 2013), or platform endorsements (Barach et al 2017). Although these studies present a sample of the recent literature on online labor markets, they are characteristic of its present focus on rating workers rather than firms.…”

Digital Labor Markets and Global Talent Flows

“…Notes: Taken from Horton (2016a). Panel A describes application timing from the perspective of Pacific Standard Time on the West Coast of the United States.…”

“…Two important details to note are 1) many digital contracts (e.g., data entry) do not require extensive synchronous interaction, and 2) for those that do, many Indian workers are willing to work the originating country's business day if that is needed for securing the job. AppendixFigure 1provides a more detailed application timezone analysis taken fromHorton (2016a). This figure shows the shifting of schedules more broadly.…”

Digital Labor Markets and Global Talent Flows

“…That there are many applicants relative to openings suggests that it may be hard for workers to determine what employers are looking for or how an applicant will be assessed against other workers. On oDesk/Upwork, because of unobserved capacity to take on new projects, employers have the same problems when they pursue workers (see Horton (2016a)). These and other forms of information frictions result in sunk effort on both sides of the market before a successful match is formed.…”

“…Two important details to note are 1) many digital contracts (e.g., data entry) do not require extensive synchronous interaction, and 2) for those that do, many Indian workers are willing to work the originating country's business day if that is needed for securing the job. Appendix Figure 1 provides a more detailed application timezone analysis taken from Horton (2016a). This figure shows the shifting of schedules more broadly.…”