Value uncertainty and buyer contracting: Evidence from online labor markets

Alvin Zuyin Zheng, Yili Hong, Paul A. Pavlou

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

3 Scopus citations

Abstract

Online labor markets become increasingly important in 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 value-measured as bids price dispersion-Affects buyer's contract decisions. We find bids price dispersion has a negative effect on buyer's contract decisions. And this effect becomes smaller as a project receives more bids. The paper contributes to online labor market literature by focusing on buyer's uncertainty over common value and proposing the importance of bids price dispersion in buyers' contract decisions. Managerial implications for the platform and freelancers' bidding strategies under common value uncertainty are discussed.

Original languageEnglish (US)
Title of host publication2015 International Conference on Information Systems: Exploring the Information Frontier, ICIS 2015
PublisherAssociation for Information Systems
StatePublished - 2015
Event2015 International Conference on Information Systems: Exploring the Information Frontier, ICIS 2015 - Fort Worth, United States
Duration: Dec 13 2015Dec 16 2015

Other

Other2015 International Conference on Information Systems: Exploring the Information Frontier, ICIS 2015
CountryUnited States
CityFort Worth
Period12/13/1512/16/15

Keywords

  • Contract decision
  • Online labor markets
  • Price dispersion
  • Value uncertainty

ASJC Scopus subject areas

  • Computer Science Applications
  • Statistics, Probability and Uncertainty
  • Library and Information Sciences
  • Applied Mathematics

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  • Cite this

    Zheng, A. Z., Hong, Y., & Pavlou, P. A. (2015). Value uncertainty and buyer contracting: Evidence from online labor markets. In 2015 International Conference on Information Systems: Exploring the Information Frontier, ICIS 2015 Association for Information Systems.