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

UGC (User-generated content) websites routinely deploy incentive hierarchies, where users achieve increasingly higher status in the community after achieving increasingly more difficult goals, to motivate users to contribute. Yet the existing empirical literature remains largely unclear whether such hierarchies are indeed effective in inducing user contributions. We gathered data from a large online crowd-based knowledge exchange to answer this question, and drew on the goal setting theory to study users’ contributions before and after they reach consecutive levels of a vertical incentive hierarchy. We found evidence that even though these “glory”-based incentives may motivate users to contribute more before the goals are reached, user contribution levels dropped significantly after that. In other words, the cumulative effect appears only temporary. Our results hence 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.