Do Incentive Hierarchies Induce User Effort? Evidence from an Online Knowledge Exchange

Forthcoming, Information Systems Research

37 Pages Posted: 23 Mar 2014 Last revised: 7 Aug 2016

Paulo Goes

University of Arizona - Department of Management Information Systems

Chenhui Guo

Michigan State University - Department of Accounting & Information Systems

Mingfeng Lin

University of Arizona - Eller College of Management

Date Written: January 10, 2016

Abstract

To motivate user contributions, UGC (User-generated content) websites routinely deploy incentive hierarchies, where users achieve increasingly higher statuses in the community after achieving increasingly more difficult goals. Yet the existing empirical literature remains largely unclear whether such hierarchies are indeed effective in inducing user contributions. We gather data from a large online crowd-based knowledge exchange to answer this question, and draw on goal setting and status hierarchy theories to study users’ contributions before and after they reach consecutive ranks on a vertical incentive hierarchy. We find evidence that even though these “glory”-based incentives may motivate users to contribute more before the goals are reached, user contribution levels drop significantly after that. The positive effect on user contribution appears only temporary. Moreover, such impacts are increasingly smaller for higher ranks. Our results highlight some unintended and heretofore undocumented effects of incentive hierarchies, and have important implications for business models that rely on user contributions, such as knowledge exchange and crowdsourcing, as well as the broader phenomenon of “gamification” in other contexts.

Keywords: online knowledge exchange; motivation; status; incentive hierarchy; goals; effort; user-generated content

Suggested Citation

Goes, Paulo and Guo, Chenhui and Lin, Mingfeng, Do Incentive Hierarchies Induce User Effort? Evidence from an Online Knowledge Exchange (January 10, 2016). Forthcoming, Information Systems Research. Available at SSRN: https://ssrn.com/abstract=2413052 or http://dx.doi.org/10.2139/ssrn.2413052

Paulo Goes

University of Arizona - Department of Management Information Systems ( email )

AZ
United States

Chenhui Guo

Michigan State University - Department of Accounting & Information Systems ( email )

632 Bogue Street, Room N260
East Lansing, MI Michigan 48824
United States

Mingfeng Lin (Contact Author)

University of Arizona - Eller College of Management ( email )

Tucson, AZ 85721
United States

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