Research Note‹Are Online Labor Markets Spot Markets for Tasks? A Field Experiment on the Behavioral Response to Wage Cuts

Author List: Chen, Daniel L.; Horton, John J.;
Information Systems Research, 2016, Volume 27, Issue 2, Page 403-423.
In some online labor markets, workers are paid by the task, choose what tasks to work on, and have little or no interaction with their (usually anonymous) buyer/employer. These markets look like true spot markets for tasks rather than markets for employment. Despite appearances, we find via a field experiment that workers act more like parties to an employment contract: workers quickly form wage reference points and react negatively to proposed wage cuts by quitting. However, they can be mollified with ÒreasonableÓ justifications for why wages are being cut, highlighting the importance of fairness considerations in their decision making. We find some evidence that ÒunreasonableÓ justifications for wage cuts reduce subsequent work quality. We also find that not explicitly presenting the worker with a decision about continuing to work eliminates Òquits,Ó with no apparent reduction in work quality. One interpretation for this finding is that workers have a strong expectation that they are party to a quasi-employment relationship where terms are not changed, and the default behavior is to continue working.
Keywords: economics of IS ; electronic commerce ; field experiments ; IT and new organizational forms
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#243 0.252 states united employment compensation labor workers paper work extent findings increasing implications concerns relationship managerial wage options offer salary entry
#279 0.123 field work changes new years time change major period year end use past early century half traditional areas established strong
#84 0.122 electronic markets commerce market new efficiency suppliers internet changes marketplace analysis suggests b2b marketplaces industry examine easy product making physical
#51 0.072 results study research experiment experiments influence implications conducted laboratory field different indicate impact effectiveness future participants evidence test controlled involving
#115 0.065 quality different servqual service high-quality difference used quantity importance use measure framework impact assurance better include means van dimensions assessing
#40 0.061 increased increase number response emergency monitoring warning study reduce messages using reduced decreased reduction decrease act sessions cost good key
#295 0.059 task fit tasks performance cognitive theory using support type comprehension tools tool effects effect matching types theories modification working time