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The purpose of this paper is to provide an argument supporting the growth of online outsourcing, which will exponentially increase in the coming years with the spread of internet availability to the less-developed regions of the world. In addition, this paper stresses the role of human decision-making in fostering this growth, rather than promoting inhibitory policies because of nationalism or fear of change.

First, globalization and the three “waves” of outsourcing are discussed. Next, the economic principles guiding online outsourcing (disintermediation, the rise of global internet connectivity and the benefits of output-based pay over input-based pay) are discussed. After explaining how artificial intelligence will complement rather than replace human laborers, a case study and evidence are provided. Then, suggestions for government policies going forward, including skill development and education are provided. Finally, the debate that will inevitably emerge regarding online worker benefits is introduced.

Evidence points toward the growth of online outsourcing and the resulting increased efficiency and gains through this type of trade. The increase in freelance workers and their earnings, the investments of Google and Facebook to develop internet capabilities in less-developed regions and the reducing costs of technology (such as laptops) provide support for this argument (Elance, 2013; Forbes, 2014; Pofeldt, 2015). Finally, a case study provides evidence illustrating how individuals may gain from these advances.

This paper contributes to the literature by providing a compelling argument for the upcoming transition to increased efficiency in work through online outsourcing. Technological advances will allow the modern worker to delegate his/her mundane tasks so that he/she is free to focus on more pressing issues. This shift will multiply the domestic and foreign labor markets, creating opportunities that have not been available to this point. As this transition is not inevitable, this paper further outlines suggestions for policymakers to ensure maximized gains in the future.

This paper aims to explore the design of management teams when the critical task facing individual managers is monitoring the performance of worker teams and producing performance measures under uncertain information environments.

The authors use a multi-agent LEN framework – linear contract, exponential utility and normal density – to model the incentive provision and organizational design.

The main lesson is that the use of performance measures under uncertainty is greatly affected by the potential for free-riding in the very monitoring activities which generate the measures to begin with. Accordingly, the value of having a management team, that is the incremental benefit of having a second manager, depends on the monitoring technology. Of particular importance are the potential free-riding in monitoring effort among multiple managers and synergies gained from having more than one manager, such as correlation among the performance measures produced or improvement due to splitting workers pool into separate groups for each manager to monitor separately.

The paper pushes this line of research further by explicitly modeling the endogenous process of signal generation within a rich economic environment. In this environment, number of workers being evaluated and number of managers who produce the signals are both endogenous. Furthermore, both workers and managers are subject to moral hazard problem. In particular, the managers suffer from potential free-riding problems but may benefit from synergistic forces due to team monitoring.