Productivity and Task Heterogeneity in Online Labor Markets: A Bonus Payment Experiment

ABSTRACT We use an online experiment to investigate how monetary rewards and within‐task heterogeneity interact with workers’ productivity. By uniquely conceptualizing objective difficulty and complexity, we first investigate whether within‐task heterogeneity results in responses that are elicited solely by task characteristics related to the computational efficiency of the task doer. The subtasks’ difficulty and complexity have a robust reverse effect on every productivity outcome of the participant workers. Second, we find that monetary rewards mainly act as moderators of within‐task heterogeneity. Our investigation identified monetary rewards as a key moderator of within‐task heterogeneity. Notably, higher rewards effectively counteract the detrimental impact of task complexity and difficulty, yet we observe diminishing returns with extreme reward values. The study's central contribution lies in its uncovering of a complementary relationship. An optimally designed task coupled with a judicious reward policy not only eases workers’ perceived complexity and difficulty but also alleviates uncertainties that might otherwise hinder the achievement of high‐quality outcomes. This nuanced understanding provides valuable insights for shaping efficient task structures and reward strategies in the realm of online labor markets. An analysis of almost 20,396 crowdsourcing responses supports the theoretical model and hypotheses.