The Impact of Behavioral and Economic Drivers on Gig Economy Workers
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Bibliographic record
Abstract
Problem definition: Gig economy companies benefit from labor flexibility by hiring independent workers in response to real-time demand. However, workers’ flexibility in their work schedule poses a great challenge in terms of planning and committing to a service capacity. Understanding what motivates gig economy workers is thus of great importance. In collaboration with a ride-hailing platform, we study how on-demand workers make labor decisions; specifically, whether to work and work duration. Our model revisits competing theories of labor supply regarding the impact of financial incentives and behavioral motives on labor decisions. We are interested in both improving how to predict the behavior of flexible workers and understanding how to design better incentives. Methodology/results: Using a large comprehensive data set, we develop an econometric model to analyze workers’ labor decisions and responses to incentives while accounting for sample selection and endogeneity. We find that financial incentives have a significant positive influence on the decision to work and on the work duration—confirming the positive income elasticity posited by the standard income effect. We also find support for a behavioral theory as workers exhibit income-targeting behavior (working less when reaching an income goal) and inertia (working more after working for a longer period). Managerial implications: We demonstrate via numerical experiments that incentive optimization based on our insights can increase service capacity by 22% without incurring additional cost, or maintain the same capacity at a 30% lower cost. Ignoring behavioral factors could lead to understaffing by 10%–17% below the optimal capacity level. Lastly, our insights inform the design of platform strategy to manage flexible workers amidst an intensified competition among gig platforms. Funding: This study was supported by The Jay H. Baker Retailing Center, The William and Phyllis Mack Institute for Innovation Management, The Wharton Risk Management and Decision Processes Center, and The Fishman-Davidson Center for Service and Operations Management. Supplemental Material: The online appendices are available at https://doi.org/10.1287/msom.2023.1191 .
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.000 | 0.000 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.000 | 0.000 |
| Open science | 0.000 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it