Can platform-level changes to monetary incentives increase repeat interactions in online labor markets (OLMs)? We study this question by exploiting a change in the fee structure of the OLM Upwork, which decreased fees if the lifetime billings of a freelancer-buyer relationship surpassed thresholds. We explore the effects of incentive design on repeat interactions, which is theoretically ambiguous in traditional organizational settings, in an OLM. Analyzing a panel dataset of 24,873 freelancers, we reveal that the effects of monetary incentives are not uniform but depend on sub-group characteristics and the unique contextual factors associated with OLMs. Low-earning freelancers respond by increasing repeat interactions, whereas high-earners exhibit a surprising decline. We argue that the impact of monetary incentives depends on plat-form type. In knowledge-sharing platforms, such incentives may reduce engagement by crowd-ing out intrinsic motivation. However, in platforms with marketplace features, such as OLMs, we argue that monetary incentives induce rational behavior because participants are extrinsical-ly motivated to interact. Our findings contribute to the literatures on platform governance and incentives, offering insights into how platform-level strategies shape participant behavior, and the unintended consequences of platform incentive design.
