On service employers' hiring decisions in online labor markets: A perspective of price and quality discovery

Alvin Zuyin Zheng, Yili Hong

Research output: Chapter in Book/Report/Conference proceedingConference contribution

1 Scopus citations

Abstract

Online labor markets become increasingly important creating jobs for millions of online freelancers around the globe. However, 60% of projects fail to reach to a contract, indicating a waste of time and effort for both buyers and freelancers. Given the fact that a buyer is often uncertain about the price (common value) of a project, this paper empirically examines how this uncertainty on common valuemeasured as price dispersion-affects buyer's contract decisions and price sensitivity. We find price dispersion has a negative while quality dispersion has a positive effect on buyer's contract decisions. Meanwhile, as price dispersion increases, a buyer becomes less sensitive to prices. The paper contributes to online service market literature by focusing on buyer's uncertainty over common value and proposing the importance of price discovery in buyers' contract decisions. Managerial implications for the platform and freelancers' bidding strategies under common value uncertainty are discussed at end.

Original languageEnglish (US)
Title of host publication2015 Americas Conference on Information Systems, AMCIS 2015
PublisherAmericas Conference on Information Systems
ISBN (Print)9780996683104
StatePublished - 2015
Event21st Americas Conference on Information Systems, AMCIS 2015 - Fajardo, Puerto Rico
Duration: Aug 13 2015Aug 15 2015

Other

Other21st Americas Conference on Information Systems, AMCIS 2015
CountryPuerto Rico
CityFajardo
Period8/13/158/15/15

Keywords

  • Common value uncertainty
  • Contract decision
  • Online labor markets
  • Price discovery
  • Price dispersion
  • Price sensitivity
  • Quality dispersion

ASJC Scopus subject areas

  • Computer Science Applications
  • Information Systems

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  • Cite this

    Zheng, A. Z., & Hong, Y. (2015). On service employers' hiring decisions in online labor markets: A perspective of price and quality discovery. In 2015 Americas Conference on Information Systems, AMCIS 2015 Americas Conference on Information Systems.