Online labor platforms are important two-sided platforms in the gig economy that contract freelancers needing short-term jobs and employers eager for high-quality labor. Past research about online labor platforms focuses on optimizing the matching algorithm or enhancing employers' hiring experience. The utility of freelancers receives little attention. Particularly, the impacts of same-sided network effects (SNEs) and cross-sided network effects (CNEs) on freelancers' utility on online labor platforms remain to be largely unclear. Using a unique panel dataset from an online labor platform, we show that SNEs can decrease a freelancer's income, while CNEs increase freelancers' income. More importantly, the impacts of SNEs and CNEs are intertwined with each other. The interaction effects of SNEs and CNEs can increase freelancers' income. We explain this interesting, unknown finding by that CNEs may weaken the competition among freelancers via increasing job demands on online labor platforms.
Wang, Lijun, "The Interplay of Distinct Network Effects on Online Labor Platforms" (2023). PACIS 2023 Proceedings. 5.
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