Disentangling the Dynamic Effect of Prosumption Behavior on Service Performance in Gig Economy Platforms

The prevalence of gig economy platforms has given rise to the phenomenon of prosumption whereby service providers consume services offered by their peers. Through consuming peers’ services, prosumption allows service providers to learn from others and improve their own service performance. Yet, to-date, little is known about the dynamic effects of prosumption behavior (prosumption quality and quantity) on service performance. To this end, we collected data of 15,072 service providers and 1.03 million reviews from a leading gig economy platform. By conducting a preliminary analysis of the dataset via a combination of Panel Vector Auto Regression and Local Cubic Projection methods, we discovered that prosumption quality and quantity of services in the same category as the services provided by prosumers exert significant positive effects on future service performance. In turn, the increase in service quality reduces the prosumption quantity of services for categories that differ from the services prosumers provide.