TY - GEN
T1 - Quality-adjusted consumer surplus for online labor markets with asymmetric information
AU - Hong, Yili
AU - Pavlou, Paul A.
AU - Chen, Pei-yu
PY - 2013
Y1 - 2013
N2 - Traditional measures of consumer surplus (CS) have implicitly assumed that the quality expected is the same as the quality that is paid for ex ante. However, when product or service quality cannot be perfectly verified ex ante by consumers in markets with asymmetric information, and actual quality received may not necessarily equal quality expected, CS would not be precisely measured. In this paper, we propose a quality-adjusted measure of CS for IT outsourcing e-markets with asymmetric information. We first relax the assumption that consumers always receive the quality they expect ex ante. Second, we leverage expectationconfirmation theory to construct the utility function to derive the proposed quality-adjusted measure of CS. Measurement development is followed by an empirical study of the effects of different measures of CS. We found the quality-adjusted measure better predicts market outcomes, i.e., continuation, subsequent projects and payments.
AB - Traditional measures of consumer surplus (CS) have implicitly assumed that the quality expected is the same as the quality that is paid for ex ante. However, when product or service quality cannot be perfectly verified ex ante by consumers in markets with asymmetric information, and actual quality received may not necessarily equal quality expected, CS would not be precisely measured. In this paper, we propose a quality-adjusted measure of CS for IT outsourcing e-markets with asymmetric information. We first relax the assumption that consumers always receive the quality they expect ex ante. Second, we leverage expectationconfirmation theory to construct the utility function to derive the proposed quality-adjusted measure of CS. Measurement development is followed by an empirical study of the effects of different measures of CS. We found the quality-adjusted measure better predicts market outcomes, i.e., continuation, subsequent projects and payments.
KW - Asymmetric information
KW - Consumer surplus
KW - Market performance
KW - Online labor markets
UR - http://www.scopus.com/inward/record.url?scp=84897778878&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=84897778878&partnerID=8YFLogxK
M3 - Conference contribution
AN - SCOPUS:84897778878
SN - 9781629934266
T3 - International Conference on Information Systems (ICIS 2013): Reshaping Society Through Information Systems Design
SP - 3240
EP - 3258
BT - International Conference on Information Systems (ICIS 2013)
T2 - International Conference on Information Systems, ICIS 2013
Y2 - 15 December 2013 through 18 December 2013
ER -