Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/248924 
Year of Publication: 
2021
Series/Report no.: 
CESifo Working Paper No. 9379
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
This article reports on an investigation of the role of lock-in exploitation and the impact of reputation portability on workers’ switching behaviors in online labor markets. Online platforms using reputation mechanisms typically prevent users from transferring their ratings to other platforms, inducing lock-in effects and high switching costs and leaving users vulnerable to platform exploitation. With a theoretical model, in which workers in online labor markets are locked-in by their reputational data, we test the effects using an online lab-in-the-field decision experiment. In addition to comparing a policy regime with and without reputation portability, we vary lock-in exploitation using platform fees to consider how switching behavior might differ according to monetary motives and fairness preferences. Theoretically, this study reveals how reputational investments can produce switching costs that platforms can exploit. Experimentally, the results suggest that reputation portability mitigates lock-in effects, making users less susceptible to lock-in exploitation. The data further show that switching is driven primarily by monetary motives, but perceiving the fee as unfair also has a significant role.
Subjects: 
crowdsourcing
online markets
online labor
reputation portability
switching costs
JEL: 
J24
D91
L51
Document Type: 
Working Paper
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