A Platform Rating System and Vulnerable Workers: Evidence from Field Experiments in Singapore

What the paper says

Rating systems are a common governance tool on two-sided platforms. Research suggests that, via indirect network effects, rating systems benefit participants on both the rating side and the rated side. However, participants on the rated side may not always recognize the benefits of the rating system and may respond negatively to its introduction. The rating side may anticipate the rated side’s negative reactions and react negatively as well, especially when the rated side holds more power over the rating side. To empirically examine participants’ reactions to a proposed platform rating system in the context of a substantial cross-side power differential, we conducted two field experiments in collaboration with a Singapore-based labor platform that connects foreign domestic workers with employers (families). We found that employers, on average, were indifferent to the proposed rating system, even when the benefits to them were highlighted, with the highest-income employers exhibiting negative responses. We also found that workers reacted negatively, with those informed of the proposed rating system completely disengaging from the platform. Post hoc interviews and analyses support our interpretation that power differential underlies workers’ negative responses to the rating system. This study contributes to the literature on platform rating systems by demonstrating that, in the presence of a substantial cross-side power imbalance, rating systems may not always be perceived positively, even by participants on the rating side, whom the system aims to empower. It also constitutes one of the first efforts in management research to study domestic workers, a highly vulnerable population of workers. Funding: This work was supported by Chazen Institute of Global Business (Columbia University) and INSEAD. Supplemental Material: The online appendices are available at https://doi.org/10.1287/orsc.2023.18153 .