Financial Incentives Dampen Altruism in Online Pro-social Contributions: A Study of Online Reviews

Information Systems Research, Forthcoming

34 Pages Posted: 19 Oct 2020

See all articles by Dandan Qiao

Dandan Qiao

National University of Singapore (NUS)

Shun-Yang Lee

Northeastern University - Marketing Area

Andrew B. Whinston

University of Texas at Austin - Department of Information, Risk and Operations Management

Qiang Wei

Tsinghua University - School of Economics & Management

Date Written: August 30, 2020

Abstract

Many online platforms, such as review communities, rely on crowds’ voluntary, altruistic contributions. Some platforms attempt to provide financial incentives to encourage users to contribute. While past studies have demonstrated that monetary rewards can negatively affect individuals’ incentivized contributions, little is known regarding whether this effect spills over into individuals’ subsequent, unincentivized pro-social activities. Our paper aims to bridge this gap by studying the potential spillover effect of financial incentives on subsequent, pro-social contributions based on self-determination theory. Specifically, we conduct empirical analyses of a large Amazon review data set and use machine learning methods to identify reviewers who have received financial incentives. The econometric analyses show that the receipt of financial incentives has a significant spillover effect on reviewers’ subsequent, unincentivized reviews, which tend to have a more positive sentiment, and the reviewers tend to reduce the review length and exert less linguistic effort in writing them. We conduct a series of robustness checks and find consistent results. We also study how the spillover effects differ based on the product type (i.e., search goods vs. experience goods), incentive experience, pro-social experience, and reviewer quality, and we explore the within-product spillover effect. These findings advance the understanding of the interplay between financial incentives and pro-social behaviors and provide important managerial implications for platforms that hope to motivate users’ pro-social contributions.

Keywords: altruism, financial incentives, pro-social behavior, self-determination theory, spillover effect

Suggested Citation

Qiao, Dandan and Lee, Shun-Yang and Whinston, Andrew B. and Wei, Qiang, Financial Incentives Dampen Altruism in Online Pro-social Contributions: A Study of Online Reviews (August 30, 2020). Information Systems Research, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3683253

Dandan Qiao (Contact Author)

National University of Singapore (NUS) ( email )

13 computing drive
Singapore, 117591
Singapore

Shun-Yang Lee

Northeastern University - Marketing Area ( email )

Boston, MA 02115
United States

Andrew B. Whinston

University of Texas at Austin - Department of Information, Risk and Operations Management ( email )

CBA 5.202
Austin, TX 78712
United States
512-471-8879 (Phone)

Qiang Wei

Tsinghua University - School of Economics & Management ( email )

Beijing, 100084
China
+86-10-62789824 (Phone)
+86-10-62771647 (Fax)

HOME PAGE: http://www.sem.tsinghua.edu.cn/en/weiq

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