EconPapers    
Economics at your fingertips  
 

Trust and Disintermediation: Evidence from an Online Freelance Marketplace

Grace Gu () and Feng Zhu ()
Additional contact information
Grace Gu: Harvard Business School
Feng Zhu: Harvard Business School, Technology and Operations Management Unit

No 18-103, Harvard Business School Working Papers from Harvard Business School

Abstract: As an intermediary improves trust between two sides of its market to facilitate matching and transactions, it faces an increased risk of disintermediation: with sufficient trust, the two sides may circumvent the intermediary to avoid the intermediary's fees. We investigate the relationship between increased trust and disintermediation by leveraging a randomized control trial on a major online freelance marketplace. Our results show that enhanced trust increases the chance for high-quality freelancers to be hired. When the trust level is sufficiently high, however, it also increases disintermediation, which offsets the revenue gains from the increase in the hiring of high-quality freelancers. We also identify heterogeneity across clients and freelancers in their tendencies to disintermediate.

Keywords: Disintermediation; Intermediary; Trust; Online Marketplace (search for similar items in EconPapers)
JEL-codes: L14 L86 O33 (search for similar items in EconPapers)
Pages: 35 pages
Date: 2018-05
New Economics Papers: this item is included in nep-ict, nep-pay and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.hbs.edu/faculty/pages/download.aspx?name=18-103.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:hbs:wpaper:18-103

Access Statistics for this paper

More papers in Harvard Business School Working Papers from Harvard Business School Contact information at EDIRC.
Bibliographic data for series maintained by HBS ().

 
Page updated 2024-07-08
Handle: RePEc:hbs:wpaper:18-103