Moral Hazards and Effects of IT-enabled Monitoring Systems in Online Labor Markets

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dc.contributor.authorLiang, Chen
dc.contributor.authorHong, Yili
dc.contributor.authorGu, Bin
dc.date.accessioned2016-12-29T00:07:16Z
dc.date.available2016-12-29T00:07:16Z
dc.date.issued2017-01-04
dc.description.abstractThis paper investigates how IT-enabled monitoring systems mitigate moral hazard in an online labor market and their effect on market competition. We exploit a quasi-experiment at Freelancer when it introduced an IT-enabled monitoring system in 2015. We use a difference-in-differences (DID) approach to identify the treatment effect of the monitoring system on employer contractor choice, market competition, and employer surplus. We found that the IT-enabled monitoring system lowers the employers’ willingness to pay the reputation premiums. Meanwhile, comparing the trend of the control group, the IT-enabled monitoring system raised the employer surplus in hourly projects and increased the number of bids. Our result suggests that IT-enabled monitoring systems have a significant effect on alleviating moral hazards, reducing agency costs, and facilitating market competition.
dc.format.extent10 pages
dc.identifier.doi10.24251/HICSS.2017.006
dc.identifier.isbn978-0-9981331-0-2
dc.identifier.urihttp://hdl.handle.net/10125/41156
dc.language.isoeng
dc.relation.ispartofProceedings of the 50th Hawaii International Conference on System Sciences
dc.rightsAttribution-NonCommercial-NoDerivatives 4.0 International
dc.rights.urihttps://creativecommons.org/licenses/by-nc-nd/4.0/
dc.subjectmoral hazard
dc.subjectmonitoring systems
dc.subjectonline labor market
dc.subjectreputation systems
dc.subjectcontract type
dc.titleMoral Hazards and Effects of IT-enabled Monitoring Systems in Online Labor Markets
dc.typeConference Paper
dc.type.dcmiText

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