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SSRN Electronic Journal
Article . 2020 . Peer-reviewed
Data sources: Crossref
EconStor
Research . 2020
Data sources: EconStor
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Two to Tango? Psychological Contract Breach in Online Labor Markets

Authors: Claussen, Jörg; Kretschmer, Tobias; Khashabi, Pooyan; Seifried, Mareike;

Two to Tango? Psychological Contract Breach in Online Labor Markets

Abstract

Despite some advantages over traditional (offline) labor markets – such as lower search costs, better matching and improved monitoring – online labor markets (OLMs) have not taken off as initially expected. In this paper, we study the factors that limit perceived project success on OLMs. Using psychological contract theory, we theorize how common OLM features including contracts with virtual monitoring, multi-freelancer projects, and simultaneous projects by a client trigger the perception of psychological contract breach among OLM participants and reduce perceived project success for both participants. We test these hypotheses using an extensive dataset with more than 143,000 transactions on the world’s largest freelancing platform, Upwork, and find that – contrary to predictions from agency theory – projects equipped with strict freelancer monitoring (hourly-pay contracts) and projects enabling peer comparison (multi-freelancer projects or multiple simultaneous projects), lead to lower perceived project success both from the freelancer’s and the client’s perspective. Our work implies that transactions on online labor markets should not be viewed solely as agency relations, and that some features that supposedly reduce agency costs and improve efficiency on OLMs come at the cost of triggering the perception of psychological contract breach.

Country
Germany
Keywords

L24, L14, 330, ddc:330, J44, gig economy, Online labor markets, knowledge work, outsourcing, platforms, psychological contract theory

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selected citations
These citations are derived from selected sources.
This is an alternative to the "Influence" indicator, which also reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Citations provided by BIP!
popularity
This indicator reflects the "current" impact/attention (the "hype") of an article in the research community at large, based on the underlying citation network.
BIP!Popularity provided by BIP!
influence
This indicator reflects the overall/total impact of an article in the research community at large, based on the underlying citation network (diachronically).
BIP!Influence provided by BIP!
impulse
This indicator reflects the initial momentum of an article directly after its publication, based on the underlying citation network.
BIP!Impulse provided by BIP!
0
Average
Average
Average
Green
bronze