Payment Schemes in Online Marketplaces: How Do Freelancers Respond to Monetary Incentives?
Abstract/Contents
- Abstract
- The rise of online labor marketplaces has allowed employers to hire freelancers around the world to perform various tasks. Though effective incentive schemes are important in any labor market, they are particularly valuable in these marketplaces, as employers are unable to directly monitor their freelancers’ behavior to ensure that the freelancers are spending their time productively. This presents a challenge for all employers, but especially those who pay by the hour, as they do not want to pay freelancers for time spent working on other tasks or not working at all. I conduct an experiment on Upwork, the world’s largest online freelancing platform, to determine how freelancers respond to a simple monetary incentive that gives them the opportunity to earn a bonus for outperforming a benchmark. I examine how this incentive affects the quality and quantity of work, as well as how responses to the incentive differ based on a freelancer’s measurable characteristics. I find that for the group of freelancers as a whole, incentives do not have a significant effect on performance. However, it seems that this is due to the fact that different sub-groups of freelancers have opposite reactions to the incentive. Freelancers with low reputation scores respond by increasing the quantity of output and improving the accuracy of their work, while freelancers with high reputation scores respond by decreasing the quantity of output, with accuracy that does not significantly increase.
Description
| Type of resource | text |
|---|---|
| Date created | March 2016 |
Creators/Contributors
| Author | Moore, Justine |
|---|---|
| Primary advisor | Shoven, John |
| Primary advisor | Shelef, Orie |
| Degree granting institution | Stanford University, Department of Economics |
Subjects
| Subject | Stanford Department of Economics |
|---|---|
| Subject | Upwork |
| Subject | Online Freelancing |
| Subject | Incentives for Employees |
| Subject | Hourly Wages |
| Subject | Performance-Based Bonuses |
| Subject | Reputation Scores |
| Subject | Job Success Scores |
| Genre | Thesis |
Bibliographic information
| Related item | |
|---|---|
| Location | https://purl.stanford.edu/fd441hd6769 |
Access conditions
- Use and reproduction
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Preferred citation
- Preferred Citation
- Moore, Justine. (2016). Payment Schemes in Online Marketplaces: How Do Freelancers Respond to Monetary Incentives?. Stanford Digital Repository. Available at: https://purl.stanford.edu/fd441hd6769
Collection
Stanford University, Department of Economics, Honors Theses
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