The Effects of Rewarding User Engagement – The Case of Facebook Apps

Information Systems Research, 24 (1), 2013, 186-200

33 Pages Posted: 5 May 2010 Last revised: 5 Sep 2014

See all articles by Jörg Claussen

Jörg Claussen

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management); Copenhagen Business School - Department of Innovation and Organizational Economics

Tobias Kretschmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management); Centre for Economic Policy Research (CEPR)

Philip Mayrhofer

Center for Digital Technology and Management (CDTM) of LMU and TU München

Date Written: November 1, 2012

Abstract

We study the market for apps on Facebook, the dominant social networking platform, and make use of a rule change by Facebook by which highly engaging apps were rewarded with further opportunities to engage users. The rule change led to new applications with significantly higher user ratings being developed. Moreover, user ratings became more important drivers of app success. Other drivers of app success are also affected by the rule change; sheer network size became a less important driver for app success, update frequency benefitted apps more in staying successful, and active users of Facebook apps declined less rapidly with age. Our results show that social media channels do not necessarily have to be managed through hard exclusion of participants, but can also be steered through “softer” changes in reward and incentive systems.

Keywords: app markets, social media, platform management, Facebook

JEL Classification: L1, L50, O33

Suggested Citation

Claussen, Jörg and Kretschmer, Tobias and Mayrhofer, Philip, The Effects of Rewarding User Engagement – The Case of Facebook Apps (November 1, 2012). Information Systems Research, 24 (1), 2013, 186-200, Available at SSRN: https://ssrn.com/abstract=1599458 or http://dx.doi.org/10.2139/ssrn.1599458

Jörg Claussen (Contact Author)

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Copenhagen Business School - Department of Innovation and Organizational Economics ( email )

Kilevej 14A
Frederiksberg, 2000
Denmark

Tobias Kretschmer

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Philip Mayrhofer

Center for Digital Technology and Management (CDTM) of LMU and TU München ( email )

Barerstr. 21
Munich, 80290
Germany

HOME PAGE: http://www.cdtm.de

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