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

Listed author(s):
  • Benson, Alan

    ()

    (University of Minnesota)

  • Sojourner, Aaron J.

    ()

    (University of Minnesota)

  • Umyarov, Akhmed

    ()

    (University of Minnesota)

In two experiments, we examine the effects of employer reputation in an online labor market (Amazon Mechanical Turk) in which employers may decline to pay workers while keeping their work product. First, in an audit study of employers by a blinded worker, we find that working only for good employers yields 40% higher wages. Second, in an experiment that varied reputation, we find that good-reputation employers attract work of the same quality but at twice the rate as bad-reputation employers. This is the first clean, field evidence on the value of employer reputation. It can serve as collateral against opportunism in the absence of contract enforcement.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 9501.

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Length: 38 pages
Date of creation: Nov 2015
Handle: RePEc:iza:izadps:dp9501
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  1. repec:sae:ilrrev:v:67:y:2014:i:2.5:p:702-733 is not listed on IDEAS
  2. Björn Bartling & Ernst Fehr & Klaus M. Schmidt, 2012. "Use and abuse of authority: A behavioral foundation of the employment relation," ECON - Working Papers 098, Department of Economics - University of Zurich.
  3. Ritter, Joseph A & Taylor, Lowell J, 1994. "Workers as Creditors: Performance Bonds and Efficiency Wages," American Economic Review, American Economic Association, vol. 84(3), pages 694-704, June.
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  8. Jeremy Edwards & Sheilagh Ogilvie, 2012. "Contract enforcement, institutions, and social capital: the Maghribi traders reappraised," Economic History Review, Economic History Society, vol. 65(2), pages 421-444, 05.
  9. Klein, Benjamin & Leffler, Keith B, 1981. "The Role of Market Forces in Assuring Contractual Performance," Journal of Political Economy, University of Chicago Press, vol. 89(4), pages 615-641, August.
  10. Abhijit V. Banerjee & Esther Duflo, 2000. "Reputation Effects and the Limits of Contracting: A Study of the Indian Software Industry," The Quarterly Journal of Economics, Oxford University Press, vol. 115(3), pages 989-1017.
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  12. Cornes, Richard & Sandler, Todd, 1994. "The comparative static properties of the impure public good model," Journal of Public Economics, Elsevier, vol. 54(3), pages 403-421, July.
  13. Holmstrom, Bengt, 1981. "Contractual Models of the Labor Market," American Economic Review, American Economic Association, vol. 71(2), pages 308-313, May.
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  15. Clive Bull, 1987. "The Existence of Self-Enforcing Implicit Contracts," The Quarterly Journal of Economics, Oxford University Press, vol. 102(1), pages 147-159.
  16. Chrysanthos Dellarocas & Charles A. Wood, 2008. "The Sound of Silence in Online Feedback: Estimating Trading Risks in the Presence of Reporting Bias," Management Science, INFORMS, vol. 54(3), pages 460-476, March.
  17. W. Bentley MacLeod, 2007. "Can Contract Theory Explain Social Preferences?," American Economic Review, American Economic Association, vol. 97(2), pages 187-192, May.
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