The Labor Economics of Paid Crowdsourcing
John J. Horton
New York University (NYU) - Department of Information, Operations, and Management Sciences
Lydia B. Chilton
University of Washington
March 27, 2010
Proceedings of the 11th ACM Conference on Electronic Commerce, 2010
We present a model of workers supplying labor to paid crowdsourcing projects. We also introduce a novel method for estimating a worker's reservation wage – the key parameter in our labor supply model. We tested our model by presenting experimental subjects with real-effort work scenarios that varied in the offered payment and difficulty. As predicted, subjects worked less when the pay was lower. However, they did not work less when the task was more time-consuming. Interestingly, at least some subjects appear to be “target earners,” contrary to the assumptions of the rational model. The strongest evidence for target earning is an observed preference for earning total amounts evenly divisible by 5, presumably because these amounts make good targets. Despite its predictive failures, we calibrate our model with data pooled from both experiments. We find that the reservation wages of our sample are approximately log normally distributed, with a median wage of $1.38/hour. We discuss how to use our calibrated model in applications.
Number of Pages in PDF File: 10
Keywords: Labor Supply, Crowdsourcing, Experimentation, Amazon Mechanical Turk
JEL Classification: C93, J30
Date posted: April 27, 2010
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