Monetary Incentives and Knowledge Spillover: Evidence from a Natural Experiment

Jing Wang (), Gen Li () and Kai-Lung Hui
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Jing Wang: Department of Information Systems, Business Statistics, and Operations Management, School of Business and Management, Hong Kong University of Science and Technology, Hong Kong, China
Gen Li: Department of Information Management and Information Systems, School of Management, Fudan University, Shanghai 200433, China

Management Science, 2022, vol. 68, issue 5, 3549-3572

Abstract: We examine how the introduction of monetary incentives by a knowledge-sharing platform affects the nonrewarded knowledge activity on the platform. Our setting is a question-and-answer platform that provides monetary incentives for holding live talks. Using a combination of coarsened exact matching and difference-in-differences estimation techniques, we find that the launch of the paid feature creates a positive spillover effect on the hosts’ free contributions, specifically, 9.4%–40.8% more answers in the short run when compared with nonhosts. The paid feature did not result in any significant change in the quality of answers. We suggest reputation building is one plausible mechanism underlying the spillover. Additional analyses reveal the spillover effect is negative for short-lived hosts in the long run, indicating possible crowding out of free contributions. The positive spillover effect for long-lived hosts lasts longer but is also reduced over time. Our findings suggest that introducing monetary incentives can be a viable business model for knowledge platforms to stimulate user contributions in both the paid and related unpaid activities. Yet platform owners should be cautious about the potential negative spillover after users stop contributing to the paid activity and develop effective strategies to maintain users’ long-term interests in the paid program.

Keywords: online Q&A communities; monetary incentives; spillover effect; reputation building; crowding out (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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