Can Reputation Discipline the Gig Economy?: Experimental Evidence From an Online Labor Market

Benson, Alan, Aaron Sojourner, and Akhmed Umyarov. 2019. "Can Reputation Discipline the Gig Economy? Experimental Evidence from an Online Labor Market.", Management Science, Forthcoming

42 Pages Posted: 20 Jan 2019

See all articles by Alan Benson

Alan Benson

University of Minnesota - Twin Cities - Carlson School of Management; Massachusetts Institute of Technology (MIT)

Aaron Sojourner

University of Minnesota; IZA Institute of Labor Economics

Akhmed Umyarov

University of Minnesota - Minneapolis

Multiple version iconThere are 2 versions of this paper

Date Written: January 10, 2019

Abstract

Just as employers face uncertainty when hiring workers, workers also face uncertainty when accepting employment, and bad employers may opportunistically depart from expectations, norms, and laws. However, prior research in economics and information sciences has focused sharply on the employer's problem of identifying good workers rather than vice versa. This issue is especially pronounced in markets for gig work, including online labor markets, where platforms are developing strategies to help workers identify good employers. We build a theoretical model for the value of such reputation systems and test its predictions in on Amazon Mechanical Turk, where employers may decline to pay workers while keeping their work product and workers protect themselves using third-party reputation systems, such as Turkopticon. We find that: (1) in an experiment on worker arrival, a good reputation allows employers to operate more quickly and on a larger scale without loss to quality; (2) in an experimental audit of employers, working for good-reputation employers pays 40 percent higher effective wages due to faster completion times and lower likelihoods of rejection; and (3) exploiting reputation system crashes, the reputation system is particularly important to small, good-reputation employers, which rely on the reputation system to compete for workers against more established employers. This is the first clean field evidence of the effects of employer reputation in any labor market and is suggestive of the special role that reputation-diffusing technologies can play in promoting gig work, where conventional labor and contract laws are weak.

Keywords: online labor markets, online ratings, employer reputation, labor markets, economics of information systems, job search

JEL Classification: L86, M55, K42, J41, J46, J83, L14, L51, J2, D82, D83

Suggested Citation

Benson, Alan and Sojourner, Aaron J. and Umyarov, Akhmed, Can Reputation Discipline the Gig Economy?: Experimental Evidence From an Online Labor Market (January 10, 2019). Benson, Alan, Aaron Sojourner, and Akhmed Umyarov. 2019. "Can Reputation Discipline the Gig Economy? Experimental Evidence from an Online Labor Market.", Management Science, Forthcoming. Available at SSRN: https://ssrn.com/abstract=3313550

Alan Benson (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

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HOME PAGE: http://https://sites.google.com/site/amb263/

Massachusetts Institute of Technology (MIT) ( email )

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Aaron J. Sojourner

University of Minnesota ( email )

Carlson School of Management
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Minneapolis, MN 55455
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6126249521 (Phone)

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Akhmed Umyarov

University of Minnesota - Minneapolis ( email )

321 19th Ave S
IDSC at Carlson School of Management
Minneapolis, MN 55455
United States

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