The Deviation Of Bid Prices

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deviation of bid prices (a commonly used measure of dispersion in literature), quality weighted BPD, distribution weighed BPD, and BPD with legitimate bids as alternative measures to check the robustness of the measurement of BPD. We also note that measurement error is not a concern for all other variables as our data was directly pulled from the firm database and the data recorded actual transactions and the buyers’ and freelancers’ behaviors in the online labor market. 4.3.2 “Buyer Contracting” Model Specification Since our dependent variable (buyer contract) is a binary variable, we estimate a logit model with robust standard errors (Equation 3). is the latent utility a buyer i infers from project j. captures the effect of BPD on the buyer’s contract decisions. is a vector of the average freelancer’s characteristics like average experience, mean quality rating (control variables that affect the DV), and quality dispersion (potential confounding factor that affects both the DV and BPD). The freelancer’s average experience and mean quality rating represents the average quality of the freelancers that a project attracts. A buyer would have more high-quality freelancers to choose from with a higher average experience and mean rating, which may facilitate the buyer’s contracting decision. Freelancer quality dispersion is measured as the standard deviation of all freelancers’ rating (or experience), which represents the diversity of choices a buyer has; thus, it is
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