Experimental Design Details
For the experimental sample, all subjects will be recruited from the crowdsourcing platform Amazon Mechanical Turk. The study is aimed exclusively at workers who are over 18 years old and citizens (or legal residents) of the United States. The experiment consists of a minimum of seven and a maximum of ten rounds, each round following the same structure. Starting with round seven and in order to prevent end round effects, a random mechanism decides with a probability of 1/3 whether the study ends with the last round completed. After the workers are assigned to a treatment condition, participants are asked to work in a new online labor market, which consists of two labor platforms: Platform% and Platform#. In each round, participants first choose on which platform they want to work. After they have made a decision, they are asked to complete a task on the respective platform, which consists of counting zeros from a series of zeros and ones. The performance of the participants will be rated with every task completion and is displayed by an average rating. In each round, the minimum amount offered for completing a task is USD 0.10. The workers are always paid for the job, independent of whether they were successful or not. Participants’ performance, however, determines their rating, which in turn affects the level of their earnings in the next round. Depending on the participant’s rating––ranging from one to five––on the respective platform, participants can also earn more money for the task. Participants will earn USD 0.15 when having reached a rating greater than 3.50, and USD 0.20 with a rating greater than 4.50. After task completion, participants will receive information on (1) their average rating achieved, (2) whether the platform charges (or increases) a fee from the next round onwards, (3) the earnings for completing the next task, and (4) the total earnings over all rounds. This information is provided respectively for Platform% and Platform#. After observing the information, participants again have to choose on which platform they want to work during the next round and start the task of counting the number of zeros thereafter. Starting with round four, a random mechanism decides in each round with a probability of 1/4 whether the platform charges a fee. The reason why fees are not charged in earlier rounds is that we want participants to establish a rating first, thereby creating the possibility of lock-in. To address second-order effects by studying the extent and frequency of a platform fee, another random mechanism decides with a probability of 1/2 whether the platform charges a fee of USD 0.01 or USD 0.05. Once a fee is introduced, it will not be reduced in the following rounds. However, again with a probability of 1/4, the fee can be increased from USD 0.01 to USD 0.05. The experiment is followed by a questionnaire to control for confounding variables and individual heterogeneity.