Abstract
AbstractWe follow the future trajectory of more targeted wage formation in labor matching platforms, such as freelancing, crowd-sourcing, home-delivery, and ride-hailing, where local job search is coordinated by improving prediction algorithms. A labor matching platform is modelled as a directed search and matching market. We observe that targeted wage setting promotes efficient matching and longer employment spells. However, because a higher employment rate accentuates any disparities between available workers and vacancies, the effects of targeted wage setting on firm competition depend on prevailing market tightness. The impact of targeted wage formation on workers is positive when the vacancy-to-worker ratio is intermediate but turns negative at both extremes. Our results suggest that targeted wage setting may benefit occasional workers while potentially posing drawbacks for full-time platform workers.
Funder
Ministerio de Economía y Competitividad
FBBVA
OP Group research foundation
University of Helsinki
Publisher
Springer Science and Business Media LLC
Reference66 articles.
1. Acemoglu, D., Shimer, R.: Holdups and efficiency with search frictions. Int. Econ. Rev. 40(4), 827–49 (1999)
2. Acquisti, A.: Nudges (the economics of privacy at a crossroads). In: Goldfarb, A., Tucker, C. (eds.) The Economics of Privacy. National Bureau of Economic Research (2024)
3. Acquisti, A., Taylor, C., Wagman, L.: The economics of privacy. J. Econ. Literat. 54(2), 442–92 (2016)
4. Acquisti, A., Varian, H.R.: Conditioning prices on purchase history. Mark. Sci. 24(3), 367–381 (2005)
5. Adams, W.J., Yellen, J.L.: Commodity bundling and the burden of monopoly. Quart. J. Econ. 90(3), 475–498 (1976)