Effects of IT-enabled Monitoring in Online Labor Markets
This 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 enhanced offline tracking features in 2015. Using a large dataset including 17,827 fixed-price projects and 8,563 hourly projects, we use a difference-indifferences (DID) approach to identify the treatment effect of the implementation of IT-enabled monitoring systems on employer contractor choice, employer surplus and market competition.
Bin Gu is a Professor of Information Systems and the Associate Dean of China Programs at Arizona State University’s W. P. Carey School of Business.