Signals that sharing economy service providers should send out: The case of codementor

Abstract

A sharing economy is an economy that enables individuals to share their assets with or provide services to those in need through online platforms. Information asymmetry prevents consumers from effectively choosing the best service provider for their needs. Therefore, service providers should offer high-quality signals to address this problem. Unlike other studies, which have focused on platforms for sharing tangible assets (e.g., houses), in this study, we focused on platforms for sharing intangible assets (e.g., knowledge). Specifically, we adopted signaling theory to develop a research model for determining the internal and external signals that service providers should provide on their platforms to attract customers. Public data were collected from the Codementor platform by using Python web scraping. After rigorous data processing, the data obtained from 612 service providers were analyzed to identify key signals. Four crucial internal signals were identified: availability of follower information, availability of reviews, free trial, and service cost. In addition, two crucial external signals were identified: number of projects accomplished and endorsements from other websites related to mentor performance. Overall, our findings expand the application of signaling theory to intangible asset transactions and enable service providers to identify the essential signals that they should provide on their sharing economy platforms to increase the number of consumers interested in their services.