Experimenting with incentives for information transmission: Quantity versus quality
Jonathan Lafky and
Alistair J. Wilson
Journal of Economic Behavior & Organization, 2020, vol. 169, issue C, 314-331
People share their experiences of goods and services online through reviews, ratings and endorsements on social networks, potentially generating welfare-improving information that can help subsequent consumers make better, more informed decisions. While the economics literature has focused on questions of alignment and the intensive quality of provided information, another tension is extensive: in the absence of an incentive, many might choose not to provide information at all. We study three different incentives that encourage information transmission on the extensive margin, examining the tradeoffs between the quality and quantity of information. Our findings indicate substantial efficiency gains are possible relative to no incentives, even when the incentives damage the preference alignment between those sending and receiving information. In particular, our results suggest that a partially aligned incentive (similar to a referral or sales commission) can encourage the provision of information while not producing substantial reductions in quality.
Keywords: Information transmission; rating incentives; sales commissions (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:169:y:2020:i:c:p:314-331
Access Statistics for this article
Journal of Economic Behavior & Organization is currently edited by Houser, D. and Puzzello, D.
More articles in Journal of Economic Behavior & Organization from Elsevier
Bibliographic data for series maintained by Haili He ().