{"title":"Prediction algorithms in matching platforms","authors":"","doi":"10.1007/s00199-024-01566-9","DOIUrl":null,"url":null,"abstract":"<h3>Abstract</h3> <p>We follow the future trajectory of more targeted wage formation in labor matching platforms, such as freelancing, crowd-sourcing, home-delivery, and ride-hailing, where local job search is coordinated by improving prediction algorithms. A labor matching platform is modelled as a directed search and matching market. We observe that targeted wage setting promotes efficient matching and longer employment spells. However, because a higher employment rate accentuates any disparities between available workers and vacancies, the effects of targeted wage setting on firm competition depend on prevailing market tightness. The impact of targeted wage formation on workers is positive when the vacancy-to-worker ratio is intermediate but turns negative at both extremes. Our results suggest that targeted wage setting may benefit occasional workers while potentially posing drawbacks for full-time platform workers.</p>","PeriodicalId":47982,"journal":{"name":"Economic Theory","volume":"18 1","pages":""},"PeriodicalIF":1.2000,"publicationDate":"2024-04-04","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economic Theory","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s00199-024-01566-9","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
We follow the future trajectory of more targeted wage formation in labor matching platforms, such as freelancing, crowd-sourcing, home-delivery, and ride-hailing, where local job search is coordinated by improving prediction algorithms. A labor matching platform is modelled as a directed search and matching market. We observe that targeted wage setting promotes efficient matching and longer employment spells. However, because a higher employment rate accentuates any disparities between available workers and vacancies, the effects of targeted wage setting on firm competition depend on prevailing market tightness. The impact of targeted wage formation on workers is positive when the vacancy-to-worker ratio is intermediate but turns negative at both extremes. Our results suggest that targeted wage setting may benefit occasional workers while potentially posing drawbacks for full-time platform workers.
期刊介绍：
The purpose of Economic Theory is to provide an outlet for research - in all areas of economics based on rigorous theoretical reasoning, and
- on specific topics in mathematics which is motivated by the analysis of economic problems. Economic Theory''s scope encompasses - but is not limited to - the following fields. - classical and modern equilibrium theory
- cooperative and non-cooperative game theory
- macroeconomics
- social choice and welfare
- uncertainty and information, intertemporal economics (including dynamical systems)
- public economics
- international and developmental economics
- financial economics, money and banking
- industrial organization Economic Theory also publishes surveys if they clearly picture the basic ideas at work in some areas, the essential technical apparatus which is used and the central questions which remain open. The development of a productive dialectic between stylized facts and abstract formulations requires that economic relevance be at the forefront. Thus, correct, and innovative, mathematical analysis is not enough; it must be motivated by - and contribute to - the understanding of substantive economic problems.
Officially cited as: Econ Theory
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