Paying Gig Workers

Sebastian Butschek, Patrick Kampkötter and Dirk Sliwka

VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking from Verein für Socialpolitik / German Economic Association

Abstract: We study the compensation of gig workers in a natural field experiment. To derive testable predictions, this paper presents a formal model capturing a central feature of online freelance work: gig work- ers' ability to choose both how much to work and how big an e¤ort to make. We analyse the set-up in a principal-agent model, showing that the optimal contract includes a sales-based commission and uses a gig-based piece rate to insure a risk-averse agent. This piece rate is in- creasing in her risk aversion, intrinsic motivation and ability. We then predict the e¤ects of introducing a gig piece rate while reducing the commission rate. The effects on the agents' choices of quantity and quality are heterogeneous in their risk aversion, intrinsic motivation and ability.

Keywords: Incentives; Risk Aversion; Intrinsic Motivation; Sales Compensation; Multitasking; Field Experiment (search for similar items in EconPapers)
JEL-codes: D23 J33 M52 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-hrm and nep-upt
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:vfsc17:168149

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