Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/180247 
Authors: 
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper No. 6985
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Employers in an online labor market often pursue workers with little capacity to take on more work. The pursuit of low-capacity workers is consequential, as these workers are more likely to reject employer inquires, causing a reduction in the probability a job opening is ultimately filled. In an attempt to shift more employer attention to workers with greater capacity, the market-designing platform introduced a new signaling feature into the market. It was effective, in that when a worker signaled having high capacity, he or she received more invitations from employers, rejected a smaller fraction of those invitations, quoted a lower price to do the work, and was more likely to be hired. A back-of-the-envelope calculation suggests the signaling feature alone could increase market surplus by as much as 6%, both by increasing the number of matches formed and by helping to allocate projects to workers with lower costs.
Subjects: 
labor economics
market design
digitization
Document Type: 
Working Paper
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