Two-sided platforms are typically plagued with asymmetric information, limiting market efficiency. Situated in the context of the increasingly popular online platforms for labor contracting (herein referred to as “online labor markets”), this paper investigates whether the implementation of...

Two-sided online platforms are typically plagued with hidden information (adverse selection) and hidden actions (moral hazard), limiting market efficiency. Situated in the context of the increasingly popular online platforms for labor contracting (herein referred to as “online labor...

This paper investigates how IT-enabled monitoring systems mitigate moral hazard in an online labor market and their effect on market competition. We exploit a quasi-experiment at Freelancer when it introduced enhanced offline tracking features in 2015. Using a large dataset including 17,827...