Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207491 
Year of Publication: 
2019
Series/Report no.: 
IZA Discussion Papers No. 12667
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
We study the performance effects of payment schemes for freelancers offering services on an online platform in an RCT. Under the initial scheme, the firm pays workers a pure sales commission. The intervention reduces the commission rate and adds a fixed payment per processed order to insure workers against earnings risk. Our experiment tests predictions from a formal model on labor supply and performance for individuals with different degrees of risk aversion and intrinsic motivation for the task. The treatment did not affect labor supply and even though the commission rate was reduced by 50% we find no sizeable loss in sales per order. However, there is strong evidence for heterogeneous treatment effects. The treatment reduced performance for less intrinsically motivated workers. For more intrinsically motivated workers, however, we observe the opposite pattern as performance increased even though commission rates were reduced.
Subjects: 
incentives
risk aversion
intrinsic motivation
sales compensation
multitasking
field experiment
gig economy
on demand economy
platform economy
JEL: 
D23
J33
M52
Document Type: 
Working Paper

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