Extrinsic versus Intrinsic Rewards for Contributing Reviews in an Online Platform

Warut Khern-am-nuai (), Karthik Kannan () and Hossein Ghasemkhani ()
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Warut Khern-am-nuai: Desautels Faculty of Management, McGill University, Montréal, Québec H3A 1G5, Canada
Karthik Kannan: Krannert School of Management, Purdue University, West Lafayette, Indiana 47907
Hossein Ghasemkhani: Krannert School of Management, Purdue University, West Lafayette, Indiana 47907

Information Systems Research, 2018, vol. 29, issue 4, 871-892

Abstract: Firms have considered various forms of incentives for writing reviews, including the use of extrinsic rewards to attract reviewers. Building on this literature, we study the implications of monetary incentives on online reviews in the context of a natural experiment, where one review platform suddenly began offering monetary incentives for writing reviews. We refer to this as the treated platform. Along with data from Amazon.com and using the difference-in-differences approach, we compare the quantity and quality of reviews before and after rewards were introduced in the treated platform. We find that reviews are significantly more positive but that the quality decreases. Taking advantage of the panel data, we also evaluate the effect of rewards on existing reviewers. We find that their level of participation after monetary incentives decreases but not their quality of participation. Last, even though the platform enjoys an increase in the number of new reviewers, disproportionately more reviews appear to be written for highly rated products.

Keywords: natural experiment; online reviews; monetary incentives; difference-in-differences; electronic commerce (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (38)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:orisre:v:29:y:2018:i:4:p:871-892

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